Skanska Construction UK Ltd v Egger (Barony) Ltd.

This judgment is to be read in conjunction with the liability judgment delivered on the 1^st May 2002 in this action.

At the outset of this trial there were many hundreds of quantum issues left in dispute. By and large those of value of less than £1,000 have been settled as a result of the indefatigable efforts of junior counsel in this case. Many items of complexity and value have been considered by the Quantum experts Mr Ian Wishart for S.C.L. and Mr Simper for Egger. They have agreed the values of many items in dispute with the assistance of the structural engineering experts Professor Masterton for S.C.L. and Mr Walsh for Egger. The industry of all the experts both before and throughout the Quantum hearing has been commendable. They have served the court and the parties well in seeking to narrow issues and thereby save costs.

The GMP Contract was between Egger (Barony) Limited and Kvaerner Limited, whose successor was Skanska Construction UK Limited (SCL). In early correspondence references to Kvaerner and Skanska are almost inter changeable. Kvaerner Cleveland Bridge Limited (KCBL) was the sub-contractor who undertook the steel erection work. The principal mechanical and engineering sub-contractor was NG Bailey Limited (NGB).

I will deal with the main Quantum issues that remain in dispute in the order followed by Counsel in making their detailed submissions to me.

SCL’s pleaded case as to this claim is in the sum of £801,734. Mr Wishart, SCL’s quantum expert values it at £438,357. Mr Simper, Egger’s quantum expert puts the claim at £91,838.

During part of July and in August and September, the South site was not available for the disposal of soil from the North site. The spoil within the GMP contract, ‘the contract spoil’, had to be removed from the site at SCL’s expense unless its final destination was agreed to be on site, such as in the West Bund, otherwise it was at SCL’s risk. The availability of the South site is somewhat of a red herring. The indulgence granted by Egger for SCL to save costs and dispose of contract spoil on the South site is misrepresented as an instruction-giving rise to expense to SCL. The Southern site must be the nearest site to the North site for the deposition of spoil. Furthermore, no landfill tax is payable on spoil deposited there. There is no evidence from SCL as to what other sites they contemplated using and what the costs of these alternatives would have been.

Mr Simper and Mr Holloway, the parties’ respective quantum experts’ prior to September 2002 agreed that the volume of the overburden was 27,641 cubic metres and that the proper rate for its removal was £2.57 per cubic metre. It went over the road with minimum haulage and time expense and attracted no landfill tax.

All of the spoil from the site, howsoever generated, went onto the South site. Thus in terms of convenience as well as expense, SCL reaped considerable benefit for both the ‘contract spoil’ deposition, and that not within the contract. This claim is valued at £71,039. I accept the evidence of the experts and my value is £71,039.

The high point of the evidence in relation to SCL’s claim was that of Mr Howlett who said that there had been a corrective to the levels left by the earthworks Contractor which had left them ‘a little bit high and a little bit low’. He enlarged on this difference as being a cut of 828mm and fill of 1069mm. This implies a need for fill of 250 cubic metres which hardly connotes the generation of spoil to be removed. The experts in their joint report value this part of the claim at nil. On the evidence before me, there is no merit in this part of the claim. I reject it.

Mr Holloway and Mr Simper agreed a nil valuation for this claim. Egger contends that a figure of £5,000 was allowed for site survey costs in the build-up to the GMP and that this figure, therefore, falls within that provision. Since this survey does not arise out of SCL’s performance of its contractual obligations but from the failure of APC, the earthworks contractor to form its pre-contract obligations, this expense cannot form part of the GMP figure agreed. I hold that it is recoverable in the sum of £1,750.00.

I accept the evidence of Mr Howlett that the volume double-handled was 2,000 cubic metres. The rate to be paid for the removal of this spoil off site is the subject of heated dispute. The contract makes no material distinction for the purposes of payment between depositing spoil at an agreed onsite location or some other place off site.

The starting point is the contract itself. The relevant parts of Clause 12 provide:-

(a)

The contract contemplated that all work would be sub-contracted. In fact SCL were committed to undertake a number of direct packages which include work rates B2 and B4 which contain Bills of Quantities rates relied upon by Egger. Whilst there were no relevant sub-contracts, in interpreting the contract the Bills of Quantity rates in the Direct Packages may properly be used as a guide to the valuation of these variations by analogy. These rates provide a mechanism for the valuation of work which was of a similar character.

In my judgment there is no work of a similar character. I reject the evidence of Mr Simper that there was. The valuation calls for an approach based on a fair valuation. Mr Simper and Mr Holloway have already considered a similar operation and arrived at a figure of £2.57 per m³.

Mr Wishart proffers a figure of £4.68 per m³.

SCL paid its sub-contractor Barr £2.45 per m³ for the removal of surplus spoil from the spoil heaps which was then deposited on the South side. SCL’s own formulated claim contains £4.68 per cubic metre for excavation, £1.69 for disposal to the tip with a further allowance of £2.67 for levelling and compaction with a final 0.15p for ‘additional distance travel’. This totals £9.1 per m³ - almost as profitable as gold mining.

Mr Wishart’s ‘fair valuation’ is £4.68 per cubic metre. Coincidentally, this corresponds with the excavation rate in the Bills of Quantities. He is influenced in his view by the evidence of Mr Bradley the onsite quantity surveyor employed by SCL that a back-actor was used in this operation and concluded that the type of operation undertaken could therefore be categorised ‘loosely…as excavation’ as opposed to ‘loosely as … earthmoving’.

The wisdom of using back-ackters on top of a recently formed potentially unstable spoil heaps is questionable as opposed to the use of a front loader from a stable surface. But this work was clearly earth moving over a short distance. A fair valuation of this operation is that sensibly agreed between Mr Holloway and Mr Simper. It affords a helpful guide to this court. On the evidence before me I conclude the proper and fair valuation rate is £2.57 per cubic metre. The Claimants are entitled to £5,140.00. SCL has no entitlement in respect of APC overburden double handling.

The assessment of these quantities will depend upon the resolution of other issues in this case. The rate due for its removal, since it all went to the South side, in my judgment, properly should be £2.57 per cubic metre. If temporary stockpiles were created on site for the convenience of SCL, no double recovery claim can arise. But if quantities of spoil arose by reason of additional excavation because of changes during the period when the Southside was not available and spoil had to be stockpiled on the North side, that would give rise for double recovery. A fair and reasonable valuation of the cost of this excavation, cartage and placement, followed by a second removal would be £5.14 per m³. The use of a front loader would clearly suffice in these earthmoving operations.

This part of the claim relates to the removal of spoil heaps left by APC. The volume is agreed at 7,443 cubic metres. The proper valuation of this claim is £19,128 representing a fair rate in my judgment of £2.57 per cubic metre.

After taking into account matters conceded by the various witnesses, or in respect of which further documentation has come to light, the difference between experts is £11,286 (Mr Wishart £78,800; Mr Simper £67,514).

The principal reason for this difference is that Egger contend that the cost of equipment from SLD Pumps and others has been included within this claim, and this was equipment not used for the purposes of the temporary fire fighting system.

Mr Michael Bradley gave evidence that “He believed” that SLD Pumps were used to transfer water from three tankers into temporary storage tanks. The source of his belief was not apparent. Mr Philipson in his written evidence did not recollect the use of SDL Pumps and observed that no order or invoice had been provided. They were later produced. When shown the orders and invoices his recollection was that the three tankers hired by Skanska had onboard pumps. The £8,800 hire cost of the tankers mentioned in Mr Philipson’s evidence was, he accepted wholly referable to the provision of the temporary fire fighting system. Whilst I do not think that Mr Philipson’s recollection is particularly reliable as to these matters which occurred a very long time ago, none the less I am not satisfied that SDL Pumps were used. I am persuaded that pumps were required to transfer water to the temporary storage tanks and that the pumping capacity was provided by Skanska from the tankers. The cost of this hire (£8,800) is properly claimable and may be set off against any deductions that properly can be made.

The items said to be chargeable by SCL or deductible by Egger are nowhere properly described either in submission or in the expert evidence. There are references to letter notations which are not consistently used. An internal SCL account document, a “Conax printout” is provided which has vague descriptions of equipment hired and various invoices are put forward. The burden of proof is upon he who seeks to prove, the evidence should be presented in an intelligible and manageable way for the court. Mr Wishart SCL’s expert blandly comments:

“I noted in the files a series of invoices from a company called Plantcraft in respect of the transport and hire of 12,000 and 20,000 gallon storage tanks. The hire commenced in December 1997 and concluded in May of 1998.

I have noted in the file there is a series of invoices from a company called Andrew Sykes in respect of the hire of pumps, control panels and valves and labour attending hydro tests. The labour charge was incurred in December 1997 and the hire charges commenced in January of 1998 through to April of 1998.

I will deal with the outstanding items not agreed.

I am not satisfied that the 100mm was used for the fire main nor the tanks. I accept Mr Simper’s valuation £11,765.

I accept Mr Simper’s valuation £9,994. £833 was wrongly included by Mr Wishart in his valuation in relation to a tank not shown to have been used for this purpose.

I accept Mr Simper’s valuation £7,810. £250 was wrongly included by Mr Wishart in his valuation in relation to a tank not shown to be used.

I accept Mr Simper’s valuation £2,145. The valuation of Mr Wishart in the sum of £4,977 is based upon Mr Bradley’s evidence that an additional hydrant test was necessary because the temporary system was installed. I am not satisfied that this was so.

I accept Mr Simper’s evidence that the valuation is £7,890. I am satisfied that Mr Wishart’s valuation of £8,879 includes duplicated values of £989 claimed elsewhere.

SCL’s claim of £6,596 largely relates to the hire of SLD Pumps. Water was first delivered on the 5^th December 1997, whereas the pumps were not delivered until the 18^th December of 1997. This tends to confirm the accuracy of Mr Philipson’s evidence as to the use of SLD Pumps, and the mechanism for transfer of water from the tankers using on board pumps. Mr Simper’s valuation in the sum of £2,760 in my judgment is appropriate and I accept it.

I value this claim at £6,388. A deduction from Mr Wishart’s figure is warranted by reason of the end date of the hire.

The total value of those items agreed and those appearing above is £69,914.00. SCL are entitled to set off against the deductions made above £1,000 to represent the value of the onboard pumping capability used. The total value of these claims therefore is £68,914.

I reject Mr Simper’s argument that only 50% of the costs of setting up and transport should be SCL’s. Costs had to be incurred in any event whether or not the diesel pump was subsequently damaged.

The necessity for tank hire arose because the public main could not cope with the rate of extraction. I accept the evidence of Mr Bradley as to this matter. The charge of £1,820.00 is properly payable by Egger.

Nine Contract Amendment Records (CAR) make up this composite claim.

This CAR accounts for the bulk of the difference between the experts. There is a sum of £22,271.21 in dispute, it concerns the temporary pipe work required to connect the temporary facilities to the installed pipe work system.

The key issue in the context of this CAR is what became known as “the four inch/eight inch point”.

Mr Bradley accepted that he objected to paying NG Bailey for the four inch installation because it had been mistakenly installed; eight inch pipe work should have been installed. The important question of fact to resolve is whether or not the four inch/eight inch point was sufficiently taken into account in the assessment of this claim against Egger.

The Bailey claim originally stood at £36,411 which was reduced by Mr Bradley to £25,374. In evidence Mr Bradley said:

“Q. Does it follow from the comparison of items 3 and 11 – and I am not putting a positive case to you, I am merely enquiring. Does it follow from a comparison of those two items that you are satisfied that your reduction took sufficient account of the eight inch/four inch point?

A. I believe so, yes.

Q. Very well”

Mr Philipson’s evidence, upon which Mr Simper based his valuation was clear:

Mr Philipson has retired from his position as works manager of the Egger Barony plant. He has been employed to assist in putting together Egger’s counterclaim and defending SCL’s claim. His attention was properly focused upon the issue and he had the opportunity to express himself at all stages. Mr Simper’s approach is flawed in respect of the four inch/eight inch part of the claim, because of his reliance upon Mr Philipson. Mr Wishart’s valuation includes Everard’s costs which include a Non Productive Overtime claim which had been already considered under ROD 424. A deduction of £120 should therefore be reflected in the valuation of the NG Bailey additional works valuation. This becomes £25,254.89.

The balance of the dispute concerns three CARs.

CAR 208 related to the cost of filling the permanent tanks from the temporary facilities. The claim is valued at £1,308. It has nothing to do with the temporary fire fighting system. I reject this claim.

The CAR 214 is a claim for the costs of insulation which was fitted to temporary process water pipe work. In my judgment this is not shown to be relevant to the temporary fire fighting system, I reject this claim.

CAR 257. The works described were to “strip out temporary MWS branched process water boost set and make good installation.” Mr Percy in his written evidence at the liability trial confirmed that the work related to the process water system and not the fire fighting system, I reject this claim.

I am satisfied that this relates to the temporary fire fighting system, a connection was removed from the temporary fire fighting pump. There is no warrant for sharing the costs. SCL’s claim is made out in the sum of £500.

This claim is for £5,530. Mr Howlett accepted that there was less excavation than originally claimed. He confirmed however, that the quantity of hard core back filling that was claimed, was essentially correct. Mr Philipson in his evidence did not recall excavation at all in the area claimed for and asserted that the hard core placed was not in fact removed. I accept that there are traces of hard core left, but that the bulk has been removed. On the evidence I value this claim £2,250.

This claim is now admitted by Egger, it relates to the use of equipment to lift tanks on and off vehicles. The value of this claim is £1,138.

This claim H3 in total is worth £100,587.48.

Clause 1.16.1 of the Contract provides a mechanism which enabled the Employer to set out further details of that already contained in the Employer’s Requirements “Clothing the bare bones requirements with particularity”. The emphasis is on detailing and the clause does not provide a route whereby Egger could instruct new requirements outside the properly interpreted scope of the Employers Requirements. The proper approach is that demonstrated by Professor Masterton in his evidence on day 14 at page 13:

“Q. Could you briefly explain to the learned judge how, as a practising engineer, you regard the distinction between change and detailing?

A.. Indeed, I will do my best to summarise without reading word for word.

The approach I took, I felt it was important that my view on the definition of detail be put across, because I think there is reference to it at various occasions in this joint statement. Detailing is a very familiar concept to engineers. We produce drawings broadly in two classifications, the first being classification of general arrangements and then the second group being detailed drawings.

Mr Walsh Egger’s expert structural engineer wrongly concludes that 1.16.1 is a mechanism which enables change requirements to be instructed by Egger as opposed to the prescription of detailing within the scope of the Employer’s Requirements. This error informs the whole of his approach and leads to his adopting an inaccurate criterion for identifying what is a change. It is clear that he is mistaken in his view as the degree of latitude that SCL had under the GMP contract albeit of a design and build character, in matters on design. True it is that there was discretion in respect of matters clearly of their choice, that where Egger by the post contract issue of drawings insisted on certain matters that was not a design and build choice by SCL but a change instructed by Egger.

References have been made to the letter of the 27^th March 1997. The first three paragraphs relate to the Chip Grader Building, to the Press Area and to the Pallman Ring respectively. The text goes on to say:

“Items one two and three are details taken from other plants and are meant to be indicative only of the possible extent of ducts required.

The fourth and sixth items mentioned are the Pallman Mill, and equipment and five Finishing Line”.

The letter further provides that:

“Items four and five are drawings giving an indication of details actually relating to this project”.

(my emphasis)

I deal with the contentious items in the schedule entitled Machine Bases (Others) in the order that they are dealt with there.

Mr Walsh readily accepted that it was not until the 1^st May in two Hanel drawings 9710/04/04 that the plinths were clearly shown and annotated, but he maintained that sufficient information was given in an earlier Egger drawing 3.4 (Production and Finishing) to infer a requirement for plinths. He says that there are vertical lines which suggest plinths and loadings. It is contended by Mr Davies Q.C. that the only logical inference to be drawn from the fact that process plant was to be installed, was that there would necessarily be a plinth to support the plant on the floor slab. Professor Masterton when asked to consider the arrow loadings expressed the view that they were of no significance in determining whether or not plinths were intended. He said that the drawing was equivocal as to what was to be provided by the contractor, and what may be provided by the machine supplier. The lines which he characterised as “indeterminate and unclear” could in fact represent parts of the machine itself, or housing for a motor as part of machinery. He also pointed out that there was no clue as to dimension.

Having carefully considered the plans with the assistance of the two experts I have no doubt that Professor Masterton is correct, and I find that the plinths 22 to 24 inclusive are changes outside the original scope of the Employers Requirements and a further change from the refined requirements shown on Hanel drawing 9710/04/1. Thus, in the Production Hall (Zone B) two type A plinths (£2,695) four type B plinths (£877), two type C plinths (£538), represent the value of the changes: a total of £4110.00.

This is the claim for the foundation and floor slab for the plinths. Egger contend that loadings were given at tender and did not change significantly, and since the slab was to be provided in any event, there is no question of a change to the employer’s requirements. SCL adopted a raft solution as they were entitled to, making it a contractor’s own design decision.

Mr Walsh initially said that the plinths had no significant effect upon the foundation designed, but he accepted that he had not specifically addressed the question of the relative loading of plinths and machinery. He was given the opportunity to do so on the basis of Professor Masterton’s figures during the trial. Eventually he arrived at a plinth concrete weight of 443 KN and a machine loading of 900 KN.

The considered view of Professor Masterton was that additional loading of the plinths on the floor slab had substantial effect on the design of the foundation, giving rise to additional cost. I accept the analysis of cost put forward by Mr Ian Wishart in preference to that of Mr Simper in this respect, the value of this change I find upon the evidence to be £6,139.00.

This claim relates to the base of the chimney in the boiler room outside Zone B. Neither Professor Masterton or Mr Walsh dealt with it in their original reports. Egger do not accept that this item is a variation contending that the chimney must stand on something, it could not be based on the bare ground. Unsurprisingly Professor Masterton did not initially consider a chimney base to be a machine base. SCL have not made out this claim, I reject it.

These “walls” are in fact more properly plinths. Neither expert in their original reports addressed these requirements. The inference is warranted that neither expert considered the item to be a change. In the latest joint report Professor Masterton accepts that they were shown in drawings prior to the 17^th April 1997 and accepts that only changes outside the design scope instructed after this stage should be valued. Mr Walsh said the plinths are shown and illustrated on “view N of a Buttner drawing 26^th March 1997 with loading sufficient to enable a design to be carried out. I agree with him and reject this claim.

SCL claim for the difference between the excavation of, and construction of three individual two metre deep pits (one 2 x 2 metre and 2 metre x 0.7 metre) in the plan and the as built single large pit 17.6 metres by 2 metres by 2 metres deep shown in drawing 42883/D/CIV/173AB. It is contended that the construction process incurred delay and disruption which could not have been foreseen at the time of tender. The issues are what did the pre-tender drawings information show, and was the “as built” within the design scope of the Employer’s Requirements?

Professor Masterton’s view is that the three individual pits are what reasonably could and clearly were inferred by Skanska as indicated in the Mott McDonald drawing CIV 1004A. In cross-examination he was shown an Egger plan which it was claimed showed one continuous pit. The cross sectioning however did not bear that interpretation, and at points M/S no pit in fact was shown. Mr Walsh’s interpretation was that a drawing AJSP number 9517/531 showed a large single continuous pit. That drawing was clearly an Auto Cad drawing used and overwritten to draw attention to the fire escape issues. I accept the evidence of Professor Masterton that this plan whilst it depicted a rectangular shape in the area of what became the as built Hammermill pit, is no sound basis for the requirement by implication of a large continuous Hammermill pit. Firstly the rectangle depicted extended outside the footprint of the building. Secondly, the lines on the plan are as consistent with a plinth two inches high or two metres high as with a pit. Mr Walsh has used the luxury of hindsight, not available to the Contractor and his designers to inform his present view. I do not accept his evidence therefore as to the interpretation of the relevant drawings. I reject his construction, I find that there were changes outside the scope of the original Employer’s Requirements. The costs of the pit and associated details should therefore be borne by Egger offset by the cost of the four plinths to support the ring mill no longer required. The quantum experts have agreed the costs of this change to be £4,648.00, I accept that evidence and value this claim accordingly.

Both Mr Walsh and Professor Masterton agreed that there were changes in relation to these. Professor Masterton says the changes instructed are additional to the design scope as set out in the Employer’s Requirements, and could not reasonably have been allowed for by Skanska in their commercial risk assessment. As well as changes to overall size there are additional metal inserts and other complexities to be valued, such as the two stage construction process which could not be anticipated from the Employer’s Requirements. Mr Walsh is of the view that these changes are within the scope of clause 1.16.1 and a valuation is not therefore necessary. He also makes the point that the size at tender was 23 by 6 by 1.8 metres giving a volume of 248 cubic metres whereas the constructed size was 22.2 x 4.3 x 1.2 metres giving a volume of 133 cubic metres. I do not accept Mr Walsh’s evidence that changes are within clause 1.16.1. They are clearly not detailing matters. In terms of complexity and degree they are additional to the Employer’s Requirements. I accept Professor Masterton’s evidence.

The quantum experts agree the value of these changes amount to £24,980,00, I value this claim in that sum.

The experts have identified the changes that have occurred between tender and as built. Mr Walsh regards them as design development, and Professor Masterton as changes. In cross-examination Professor Masterton on day 15 page 79 of the transcript said:

“Q. Thank you very much. So we have changes in dimensions. Are the changes all upwards or are there some downwards?

A. It ended up as partly a shallower pit than allowed for, and that is – in that case that would be an offset that would be set against the final cost, yes. It became a two-level – well, the central channel introduced between two sides of the moving floor pit was a change. It was previously a single pit over the full width.

Q. It was seen as a single pit with the floor moving hack chips one way rather than moving them in opposing directions into the channel?

A. Quite right.

Q. And you do not accept that that could be within the concept of design development in this kind of scheme?

A. Most certainly not, and most certainly not within the control of Mott MacDonald. That was a process instruction.

(Emphasis added).

I accept that evidence. Such a change was not in the gift of the designer. It was not detailing, it was a requirement to accommodate a change not within the original Employer’s Requirements. I accept that it is simplistic and not helpful to have regard to mere volumetric changes in the construction of pits such as this, and the hack chip moving floor. The change in method of construction, differences of levels to be accommodated and changes in use of steel are all considerations which do affect the complexity and therefore the cost of the changed operation. I hold that this claim succeeds, and the value is £19,447.00 reflecting the change from tender to as built.

The experts agree that two plinths 1.7 x 0.6 x 1.7 metres high and the increase in the size of two plinths at section B-B (Hanel drawings 9710/05/05A & B) are additional to tender. Professor Masterton says that though not of great cost significance the changes are additional to the design scope as set out in the Employer’s Requirements and could not reasonably have been foreseen in their commercial risk assessment. Mr Walsh is of the view that this is a matter of pure detail. I agree. I dismiss this claim.

There is no evidence adduced by SCL in support of this claim for this item, neither has it been pleaded, this claim is not proved. I dismiss it.

Please see below where the soft spot issue is dealt with. The resolution of this claimed item is dependent upon that.

The contract did not require a building to house the drier combustion chamber. One was instructed and built. The sole issue to be determined is the quantum. There is no dispute that Skanska actually constructed the work on the construction drawings, Mr Walsh however says that the work constructed was excessive, and the building is over engineered. On the 11^th February 2003 he produced a sketch of the building he says Skanska should have constructed. Professor Masterton had not seen the sketch, and was not made aware of Mr Walsh’s view until April 2003 in the course of the trial. Whilst this building houses some machine bases it was not jointly considered by the experts as a separate item. Mr Simper has valued the Walsh design of the 11^th February 2003 at £29,226. Mr Wishart has valued the as constructed building at £67,867. In the liability judgment at paragraph 165 it was found that “Egger are liable for all changes indicated in Professor Masterton’s illustrative appendix B except in so far as they are caused by further detailing contained in the drawing that should have been furnished from the 1^st May ….” The addition of the chip dryer building was a change identified in Professor Masterton’s appendix A-B and it falls to consider what goes beyond further detailing to assess Egger’s liability.

Professor Masterton’s view was the decision by the designer to adopt an 18.8 metres square foundation with a uniform depth of 1.5 metres was a sensible and pragmatic response to the requirement for this building. It is apparent that with the constraints of time, when an additional building was instructed housing equipment with differing foundation requirements in a fast track project, it was eminently sensible to use a uniform foundation. I accept that in optimum conditions it would have been open to the contractor to use combined foundations as in Egger’s other plants, but as Mr Walsh was constrained to accept, the designer “provided a support system which works”, and accepted that the design was one which a reasonably diligent and competent engineer could arrive at in the circumstances confronting this designer. He did not see fit to criticise the design in his original report. This illustrates the dangers of judging matters with the wisdom of hindsight and failing to be mindful of the timing of the instruction in a fast track project where ease of construction is a consideration, amongst others in saving costs by limiting delay and disruption, I reject Mr Walsh’ speculative evidence which despite hindsight has the hallmark of not being thought through. It is an approach furthermore which seeks to go behind the clear terms of the liability judgment.

This claim is proved by SCL. There is no alternative quantification on the basis of the “as built” put forward by Mr Simper. The only evidence before me as to costs is that of Mr Wishart, there is no reason why his evidence should not be accepted. I do accept it. I find the value of this claim to be £67,867.

This item in fact relates to the SEKA tower. The original EWK drawing 91671202 and available at tender stage reveals a most complicated piece of building work. The Scheuch filter drawing 912-0465-11B reveals a base which is smaller than the EWK and far simpler, and therefore cheaper to construct. The original fixing required 36 fittings radially around the circumference. The as built, required four sets of fixings to receive a sealed drum. The original had 18 ducts in the foundation design and the as built none. The sump in the as built was smaller and simpler than that provided in the original. The area including the external drain was extended from 128m² to 255m².

The changes were not of mere detail as Professor Masterton said, and whose objective assessment in this regard I accept. At day 15 page 2:

In my judgment Professor Masterton’s analysis and approach cannot be faulted. I find that there was a change. Its valuation results in a credit to Egger, arising in part out of the economies in construction costs arising out of the instructed change. The change is valued by the experts at £41,343. Credit to Egger must be given for the tender allowance.This gives a credit of £10,801.00 to Egger.

The experts agreed that the foundations of the screens and the Hammermill bunker foundations were additional. Mr Walsh subsequently revised his opinion and does not hold to the agreement in relation to the screens, maintaining that those foundations were indicated in the pre-tender information provided with a letter of the 25^th March 1997, which included drawing extracts and sketches indicative of loadings and foundations. Sketch G2/250 indicated to the designer the need for discrete foundations or machine bases to accommodate loadings in relation to screens. These screens vibrate in order to separate various gauges of wood chips and this gives rise to both static and dynamic loading. It was accepted by Professor Masterton in relation to the screens that a 300mm slab foundation with mesh reinforcement would be a satisfactory design solution, and that a tender allowance should be made for the discrete area provided underneath the screens. In cross-examination it was contended that because an AJSP drawing 9517/534 showed shaded areas in both Zones C and D indicating areas of floor slabbing labelled machine bases, that the whole of the area including the sites of the Hammermill bunker foundations and screens was indicated as warranting a 300mm reinforced slab, in other words a gigantic machine base. It is argued by Egger in relation to the Hammermill bunker foundations, which are clearly additional that a credit should be allowed on the basis of a 300mm reinforced slab as indicated in the AJSP drawing entitled “Road Finishes”. As Professor Masterton rightly observed an individual pricing machine bases would hardly go to a Road Finishes drawing for guidance on machine bases, especially when there was contemporaneous drawing information given zone by zone indicating discrete machine base requirements. As to the Hammermill bunker foundation this claim succeeds. No credit in my judgment is due to Egger. As to the screen foundation the claim is rejected.To the extent that the claim succeeds the proper value is £8,500.00.

Liability and quantum are no longer an issue: this claim is made out in the sum of £36,022.

Two plinths are accepted by the experts to be additional, the only evidence as to their value is that of Mr Wishart. The claim is made out in the sum of £567.

The experts have agreed both liability and quantum and this claim succeeds therefore in the sum of £78,000.

These have been valued at nil and no issue now arises.

These relate to tender allowances which are dependent for a resolution on the determination of the individual claims against which they are sought.

Paragraph 165 of the Liability judgment states that:

“Egger are liable for all changes indicated in Professor Masterton’s illustrative Appendix B except in so far as they are caused by the further detailing contained in the drawings that should have been furnished on the 21^st May and those should have been provided on the 27^th May and were also marginally late. The resolution of the issues as to which drawings fall within this description is a matter for expert agreement or determination at the trial on quantification”.

Mr Walsh comments that “This is not an area of disagreement as per the joint statement and is not addressed in the Masterton report”. The reference to the Masterton report of course is that which relates to the quantum issues. It did not fall to be addressed in that report because it was addressed in his report on liability issues and was included in Appendix B referred to in the Judgment above.

By ROD 22 dated 22^nd May 1997 Kvaerner were instructed to supply the spreader support steel work. The spreader loadings were supplied by Egger and received by Kvaerner on the 21^st May 1997. The spreader steel work had to be designed in order that the foundations could be calculated. A tender allowance was made for a 400mm thick floor slab over an area 6.5m wide by 25m long. The as built shows a more complex layout with two large bases over most of the area, 750mm thick. There is no criticism by Mr Walsh of the design and construction strategy and there is no suggestion that the design of the as built foundation was excessive. This claim succeeds. I am informed that the agreed quantum is £11,800. The schedule V13 indicates greater sums.The claim succeeds in the sum of £11,800.00.

The glue kitchen is housed in a glazed area in the Production Hall. The resin blender is supported on raised steel above a bunded area, the resin bund. In the as built situation a channel runs through the resin blender bund and passes into and under the floor of the glue kitchen into a settlement tank. The tender requirement was a resin blender bund with a recessed floor with falls draining into a sump in the glue kitchen, and thereafter draining to a foul drain. The channel designs instructed varied the profiles from square channels to half round channels. The changes and designs were prescribed by Egger. In my judgment these were not instances of design development by SCL. They were requirements given by Egger. I accept the evidence of Professor Masterton, day 14 page 63:

“I do not believe they are design development. They are not within the gift of either Skanska or Mott McDonald to make those changes unilaterally”.

The corollary is that if on a valuation exercise there is a saving that goes to the credit of Egger. I reject Mr Walsh’s evidence that these changes were design development. These claims succeed as to Item 59, £5,548 as to Item 60 £3,147. These sums I understand are agreed and are net of the respective tender allowances.

There is a financial benefit to be derived from the resolution of this claim. The claimant says the benefit should be conferred on the defendant, which the defendant resists.

SCL contend that Hanel drawing 9710/04/06 introduces further variations to the existing plinths and two additional ones. This in the context of the Employer’s Requirements showing no variation at floor level. The drawing was issued more than a month after the due date, I reject Mr Walsh’s evidence that Egger’s requirements were finalised in the Siempelkamp drawings issued on the 1^st May. The further changes were made by the Hanel drawing which was issued a month after the due date. The SCL claim succeeds, thus the agreed savings of £10,000 resulting from the instructed changes accrue to the benefit of Egger.

The description of this item chosen by the experts is clearly material in informing the court’s approach to this claim valued by SCL’s quantum expert at £113,380. Mr Simper, Egger’s quantum expert observes that this figure is for the entire chip grader building with no tender allowance made. Professor Masterton says that the justification for this claim arises from the instructed changes to process steel work inside the original building, and the foundations that were required for this, and a number of changes which occurred subsequent to the tender drawings being issued. He accepted that at tender stage there was always a necessity for a foundation base for the chip grader building. The principal changes result from the foundation consequences of additional process steel work. There were more additional stanchions inside the building to support the process steel work for the machines that perform the manufacturing process. Through Mott McDonald drawing 171/CIV Revision A issued on the 20^th August 1997 there was limited change succinctly recorded by Mr Walsh in his report E9.71 at box 3:

“Revision B trench added background required

Revision C details of recess required

The material change however post tender arose from the information supplied from May to August that incorporated the additional changes including the process steel requirements. Some of this is identified in Professor Masterton’s Annex B.

Thus Egger drawings 15.03./06/ to 09 received on the 16^th June of 1997, revised the shape and size of the building compared to that at tender, and necessitated a complete redesign of the foundation. Late released draft drawings from Egger and the process contractors were received in June and July without complete foundation loads for the plant. In consequence preliminary and provisional designs had to be produced in this fast track project for the plant support work in order to determine foundation loads. That work including some of necessity duplicated, was clearly additional.

Mr Walsh’s view is that the floor channel and foundation for process steel work were truly additional but because the building and the slab were indicated in the tender fall within Clause 1.16.1. I reject his view, because liability has been determined in the liability judgment, and its specific reference to Annex B, and because his simplistic approach ignores factors such as the increases in scope and complexity. An Employer Requirement for a garden shed with facilities for a wood turning lathe at tender does not encompass a half acre factory/warehouse facility with complex wrapping and packing machinery. The latter cannot be justified as in ‘an incident of design development’ or detailing. I have dealt with Mr Walsh’s arguments as to the over slab, in relation to Item 37 supra. I accept Professor Masterton’s evidence as to the material change. I am satisfied that the appropriate tender allowance has now been factored into Mr Wishart’s valuation. The original valuation being £113,380 the final £51,168, the latter in my judgment is the proper valuation.

This items relates to the pit for the Pallmann Ring mill. Quantum is now agreed subject to liability. If the pit is additional then the entitlement is to £36,595, if not the claim is limited to the costs of a cable trench which is not in dispute and is valued by agreement at £932. The letter of the 27^th March 1997 I have dealt with earlier as to its terms and effect. Egger relies upon a plan which was one of a number served under the cover of the letter of the 25^th March of 1997, said to be indicative of the requirement of “the possible extent of ducts”. The plan showed a Pallmann Ring in another of Egger’s plants. It showed some ducting and a pit. I find that on no other relevant pre-tender plan was any pit shown for the Pallman Ring. Pits were shown for other items of process equipment, properly indicated by sections. The sawdust moving floor pit is one example. The designers drew the inference that four plinths were required and designed accordingly. The Mott McDonald retrospective as built drawings shows the pit ultimately required and some ducting.

Mr Walsh found himself in the uncomfortable position of contending that the plan indicative of ducting served on the 25^th May did not cover the duct in fact built. He accepted it as a change, but contended it did not relate to the pit. I accept the evidence of Professor Masterton that to discern the requirement of the Pallmann Ring pit from the relevant tender information, “One would have required a crystal ball”. The claim in my judgment is made out in the agreed sum of £36,595.

This claim has not been specifically pleaded. The issues are touched on in various claims that are pleaded. By necessary implication the issues are comprehended in Appendix B of Professor Masterton’s first report, which was dealt with at paragraph 165 of the Liability judgment. Both structural experts have, albeit belatedly, dealt with this item and their quantum counterparts too. It is a claim of which Egger have had good notice in the quantum files and subsequently, have been able to deal with it in evidence.

The additional working space was needed to construct in Zone E a hacker an elevated pit considerably increased in size from tender. That is accepted by Egger but Mr Walsh is of the opinion that this was part of the temporary works and therefore forms part of the contractor’s price.

Professor Masterton in evidence accepted that within the discrete claim for the considerable increase in the size of the hacker an elevated pit primary excavation is allowed for in the cost, and 200 cubic metres of working space. Asked about the further claim for £49,628 for extra working space Professor Masterton said he could not offer any comment. I accept the claim for some additional working space has been proved. Mr Simper Egger’s quantum expert has measured the working space around the perimeter of the structures to the depth indicated on the drawings. In the light of the original allowance made for working space it seems to be that Mr Simper’s quantification is based upon a properly cautious approach, and avoids the risk of double recovery. This claim is proved to the extent of £19,343.

I accept the evidence of Professor Masterton that the tender allowance was for a 225mm thick slab with single mesh reinforcement. In addition to Item 37 I have considered and rejected Mr Walsh’s view that in relation to the whole of the shaded areas marked C to D depicted in the AJSP drawing that a machine bearing foundation was indicated and therefore priced for.

I reject the contention therefore that a credit to Egger should be allowed, based upon a tender allowance for universally laid 300mm slab with reinforcement.

The same reasoning as obtained in relation to Item 65 of above applies here.

Both structural experts agree that this base on grid 44-38 is additional. The filter plant foundation changes are identified in Appendix B to Professor Masterton’s first report. The changes I accept go beyond further detailing. The claim succeeds in the sum of £2,025.

Mr Walsh says that SCL only demonstrated a change to the extent of 200mm in the base level. Professor Masterton however, gave evidence that he compared Buttner drawing 89A and as built drawing 154AB and concludes that the imbedded channels are included as well as the raising of the level by 200mm. I accept his evidence. The value of these two changes is £621.00.

This is agreed in the sum of £487.

I accept the evidence of Professor Masterton who has identified all the relevant changes between Buttner drawing 89A and the as built situation. Mr Walsh has only considered the raising of the level whereas there are five instances of imbedded channelling. These are not matters of mere detailing. This claim I accept in the sum of £6,816.

This is agreed in the sum of £394.

SCL claim £18,034 for changes in relation to the radial fan in Zone C. The radial fan was shown on the Buttner drawing on the 26^th March 1997. Mr Walsh referred to a Hanel drawing marked “on hold” he said that the radial fan detail was marked on hold, and therefore the clause 1.16.1 requirement was issued on the second issue of the drawing. He expressed the view that the radial fan base was within the requirements of Clause 1.16.1 and therefore not a change for valuation.

At paragraph 162 of the Liability judgment I extensively set out the catalogue of drawings relating to the radial fan and associated plant with their added requirements and consequential revisions between the preliminary Buttner drawing of the 21^st May of 1997 marked for execution in June of 1995 and significantly revised through until April of 1997.

A comparison of what was envisaged at tender and that which was built impels the conclusion that in terms of increased size, volume and complexity there was significant obvious change apart from the disruption and additional redesign work caused by the sequencing of information.

Buttner drawing 89A shows a base of 5090 x 4000mm with 24 pockets, the as built drawing has dimensions of 7385 x 6075mm with 39 pockets, plus a combined grout pocket/box out. The levels were later raised by 200mm using additional mass concrete. I reject Mr Walsh’s approach as being over simplistic. I have taken account of the matters in Appendix B of Professor Masterton’s report and am satisfied that there were significant changes which were not those of design development chosen by SCL or detailing, clothing the bare bones under Clause 1.16.1. I value this claim in the sum of £9,353.

This item is agreed. SCL are entitled to recover £400.

These items are agreed. SCL are entitled to recover £715.

I accept that there was an increase in concrete along the shortest edge of a ventilator foundation in unit 1, and that the ventilating unit No.2 was raised by0.228mm using additional reinforced concrete. The value of these here is £871.

The finding at paragraph 162 of the Liability judgment is final as to the liability for the change illustrated in ROD 182 which was an employer driven change. The only evidence to valuation is that of Mr Wishart. There is no reason not to accept his evidence. I do so and I find this claim proved in the sum of £4,500.

Reference was made to ducting in paragraph 169 of the Liability judgment. That must be seen in the context of the observations in paragraph 156 and the observations as to the effect of Clause 1.16.1referred to earlier.

SCL’s obligation was to provide ducts which were expressly shown or necessarily to be inferred from the Employer’s Requirements and ducts which were necessary for machine bases that were either expressly shown or necessarily to be inferred from the Employer’s Requirements, and finally ducts that were necessary for machine bases which themselves were part of the detailing provided under Clause 1.16.1 of existing requirements under the Employer’s Requirements. Mr Walsh in co-operation with Mr Grodzicki SCL’s structural engineer has been able to resolve many issues of liability and quantum relating to ducting. Those matters are set out in the schedule relating to ducting and the agreement incorporated within it.

Mr Walsh’s approach in relation to ducts is affected by his stated and erroneous interpretation of Clause 1.16.1 exemplified in his evidence as to machine bases, and similar foundations. Clause 1.16.1 is not ‘a long stop’ enabling new requirements for machine bases and foundations to be made. It empowers the employer to give information as the final detailing of those requirements already within the Employer’s requirements. Insofar as the provision of final detailing for the machine base may affect the positioning direction or provision of a duct necessary for a machine base or similar foundation Clause 1.16.1 has some limited relevance to the ducting issues.

Mr Walsh starts from the premise that the contractor was to allow for ducting for all equipment which was shown in the Employer’s Requirements. His difficulty there arises out of the reality that the Chip Dryer contains significant items of process plant and no ducts were specified either in the tender inquiry information, or the final as built arrangement. There is no suggestion that there is a necessary inference that ducts should have been allowed for and priced and a credit given for the general allowance. I will deal with these outstanding matters that Mr Walsh and Mr Grodzicki were unable to reach agreement upon.

Paragraph 175 of the Liability judgment provided:

By ROD 435 dated 8^th December 1995, the Claimant confirmed the Defendant’s request to design and construct additional under-floor ducts in the Wet Chip Area and through the Edge Beam. Clearly Clause 1.16.1 has no application here, Hanel contract drawing 9710/01/05 detailed three ducts at the south end of the Wet Chip. ROD 435 provided for the construction of three additional ones in that area and five passing through the ground beam. This claim is made out in the sum of £233.

Paragraph 176 of the Liability judgment provides:

By ROD 539 dated 7^th January 1998 the claimant confirmed the defendant’s request to design and construct additional ducts and service pits to Silos 1 to 11 inclusive as depicted on Mott McDonald drawing E-CIV-198 Rev C and E.Civ-100 Rev D. Clause 1.16.1 has no application here, this claim is made out in the sum of £8,002. I accept the evidence of Mr Gardner and Mr Philipson as to the construction of these ducts.

Mr Grodzicki’s approach is the correct one, namely that if ducts were not shown on any tender drawing or in the tender information that were required by virtue of the drawings issued on the 1^st May and the 27^th May, they are truly additional to the Employer’s Requirements not being matters of their detailing. Clause 1.16.1 has no application here. I reject Mr Walsh’s evidence based upon his interpretation of that clause. This claim is proved in the sum of £19,640. I accept Mr Gardner’s and Mr Philipson’s evidence as to the construction of this additional ducting.

I accept Mr Grodzickis’ evidence as to the interpretation of the relevant drawing. In particular, that whilst ducting from the Chip Dryer and Chip Grader and extension area to the control room was originally referred to, the relevant note relating to these areas was deleted by a later revision, I do not accept that the ducts in the Chip preparation to the Wet Chip areas are the subject of ROD 435. With the exception of the duct run between the Production Hall and workshop, all the runs shown in ROD 184 are in my judgment additional, this sum is approved in the sum of £2,250.

There is little between the parties as regards matters of principle. A substantial degree of agreement has been reached between Mr Walsh and Professor Masterton the structural engineering experts, and Messrs Simper and Wishart the quantum experts.

There is however an issue requiring the resolution of the differing perceptions that Mr Walsh and Professor Masterton have as to the effect of their agreement about warehouse steel and design time.

During the Liability trial, an issue arose as to the amount of steel to be added to the warehouse, because certain changes required by Egger in the warehouse meant that potential instability would be introduced; the building would wobble. Extra steel was needed to ensure the rigidity of the structure. The question could not be resolved by the end of the Liability trial, and a practical way forward was proposed and agreed by the two structural experts, this provided so far as is relevant:

“It is agreed that the experts will be bound by the results of a 3-d analysis to be carried out and jointly agreed. The analysis will examine in greater detail the effect of the change in stanchion layout in the Warehouse, in compliance with the design criteria set out in the Employer’s Requirements, Contractor’s Proposals and Contractors Response. Analysis to be run for the relevant parts of the building (at least to include for an area at tender comprising a 2 bay adjacent to a 3 bay stanchion spacing as well as the as built comparison between two adjacent 3 bay spacings.

It is agreed that the outcome of this exercise will be to establish a prudent and economic design in compliance with contract requirements at the time of the offer and a prudent and economic design to comply with the final requirements. It is agreed that the experts will be bound by the result and that the entitlement to payment shall be assessed as the difference between the two designs.”

(emphasis added)

Each of the experts carried out his own 3D Computer analysis. They carried out two separate analyses, each using the jointly agreed criteria. They did not carry out “a 3D analysis to be carried out and jointly agreed” had they done so there would be no room for any disagreement. They exchanged their results which were not identical. Mr Walsh’s figure following his compliant analysis was 647 tonnes and that of Professor Masterton was 661 tonnes. The difference between the two was 14 tonnes or just over 2%. They took a pragmatic approach and agreed a figure midway between the two that could mutually be signed up to as the minimum theoretical weight solution to the warehouse. That figure was 654 tonnes which when compared with the accepted weight of the tender design of 590 tonnes gives a theoretical difference of 64 tonnes. In the Structural Experts Joint Report “Areas of Further Agreement”, the following is stated under ROD 3.1:

“Both experts have carried out their 3-D analysis and agreed that the possible theoretical difference is 64 tonnes for the complete changes to the warehouse from tender to as-built. This includes all additional steel covered by RODs 3.1, 2.7, 2.8 and 2.1 and the credit fiend for the reduction in hype. Further discussion is required to reach agreement on the reasonable reliance for the accuracy to be expected of 2-D”.

(emphasis supplied)

Under the column entitled “Agreed as Built entitlement” the experts have stated TBC (minimum 64 tonnes).

Professor Masterton said of this minimum and theoretical difference in his evidence on day 14 at page 26 of the transcript:

“I make the point in my report that that is all very well, but that is with the benefit of the 3D sophisticated analysis which we had to use to prove the point that there was some change, some measurable change that required additional steelwork in the warehouse. That point had been proved by what we did , hence the additional 64 tonnes now conceded by Mr Walsh. But we had tools and time that was not available to the designers of the warehouse at the time from the point at which the change was instructed. Time was also of the essence in reaching a conclusion to the process of pre-ordering the steel.

So in my view, if the two experts with the 3D analysis and unlimited time could come within 2 per cent of each others figure, still not the exact figure but within 2 per cent of the figures, then it seemed to me to be reasonable to allow a certain further leeway to a designer under the pressue of time, and also with only a 2d analysis available to him, which would be normal practice in the industry, and I identified a figure of 5 per cent.

The as built figure based on the Lupton retrospective drawings gives a figure of 687 tonnes. Mr Walsh in evidence accepted that Lupton was a respected steel designer and that “their end product was prudent for their own circumstances”, by that I understand him to be accepting that there were pressures of time affecting design and procurement upon the steel designer. There is no suggestion that the Lupton solution was not prudent in design or uneconomic in cost. It was important not to lose sight of the fact that this was a complex fast track project. Mr Walsh firmly resisted the suggestion that the further 5% uplift suggested by Professor Masterton was justifiable or appropriate in the light of the pragmatic agreement that he had reached with Professor Masterton.

“Q. “Have you been in court yesterday and today when Mr Masterton gave his evidence-in-chief and his cross-examination evidence on whether it is appropriate to revisit the question of the steelwork overall and add an allowance which he would put at 5 per cent. Have you heard his evidence”

I am mindful that these experts have had to consider a considerable number of complex technical issues involving time consuming and difficult investigations. The areas of agreement indicate to me that they have been intellectually vigorous and willing to give and take in the resolution of the matters they had to consider. There are also sharply identified and honestly held differences of approach. In relation to this question of a general 5% uplift there is a difference of opinion as to entitlement and as to the significance to be attached to their agreement as to the 64 tonnes. As an independent expert Mr Walsh has not resiled from his conclusion reflected in the agreement that the 64 tonnes was both a theoretical and a minimum figure. There is no meeting of expert minds as to this 5% uplift. They however, both agree that an additional 12½% uplift should be added to represent additional fitting.

The experts on the 13^th November agreed to use sophisticated 3D computer technology to establish what was in the circumstances confronting Lupton “a prudent economic design” Egger submit that SCL should not be paid for the extra steel that was incorporated in the as built, because some years later, with more time and more sophisticated technology the experts established that theoretically it was possible to have done it with less steel. This is unreasonable as well as unattractive. I find that Professor Masterton’s reasoning as to the justification of an additional uplift on the agreed theoretical minimum figure is compelling. The appropriate uplift in my judgment should be 2½% giving an additional tonnage of 16.35 tonnes. At bill of quantity rates a £1,008 per tonne allowing for fittings and the cost of purlins and sheeting and uplift this claim in my judgment is worth £104,781.60.I reject Egger’s contention that there is an overlap with ROD 2.1.

Mr Wishart the Claimant’s quantum expert values this claim at £290,651. It includes the Chip preparation area steel work and modification to that steel work, and the Disc Separator steel work, Pipe Bridge steel work and Resin Blender steel work. He does not now support the claim under ROD 189 in the sum of £20,116. His quantification is now close to SCL’s pleaded case.

Mr Simper on behalf of the Defendants values the claim at £222,827. The difference is £67,823. It is accounted for by the differing approach that the experts take to this valuation. The key difference between the parties is the rate. Mr Wishart has examined the costs paid by SCL to its subcontractor Kvaerner Cleveland Bridge Limited and has based his assessment on the basis of the costs incurred by SCL adjusted to take account of items considered unreasonable. Mr Simper has evaluated it on a measured basis using rates based on Bills Of Quantity rates adjusted to take account of different conditions.

It is common ground that the steel work claimed is all new work.

The starting point is to consider what the contract provides. The relevant clause for valuation purposes is Clause 12(5)(a) as follows:

“The valuation of additional or substituted work shall be consistent with the values of work of a similar nature set out in the Sub Contracts making due allowance for any change in the conditions under which the work is carried out and/or any significant change in the quantity of the work set out. Where there is no work of a similar character set out in the Sub Contracts a fair valuation shall be made.”

(emphasis added)

The only item for steel work in the Bills is item 1B in Bill B07 giving £1,008 per tonne. This is for structural steel. The following issues arise: 1) is the process steel work of similar character to the structural steel work, 2) if it is does Mr Simper’s adjusted B of Q rate make adequate provision for “..any changes under which the work is carried out”, 3) if not, can Mr Wishart justify his “cost plus” approach to a fair valuation. Both Mr Bradley and Mr Wishart gave evidence that process steel work is markedly different from the structural steel work. In his main report, Mr Wishart stated:

“In my opinion support steel for process plant is quite different from structural steel. The section sizes and length tend to be smaller; there is far less repetitive work and site erection costs can be disproportionately high. Moreover, from my examination of the invoices from suppliers it appears that KCBL were ordering stock steel which is always more expensive.”

On the other hand the steel work with a resin blender was held in the Liability judgment to be within the GMP, it comprised (inter alia) similar steelwork supporting process plant.

Mr Simper accepts that the waste factor is higher in process steel work and has reflected this in his uplift. He has adopted the Turner and Townsend figure for fittings and waste, and their valuation for galvanising and has allowed a significant additional sum for transport. His valuation allows £236,031 per tonne for the factor of working in smaller sections and working in a confined space. I find therefore that Mr Simper’s approach to the valuation of this is the proper approach. I hold that the steel work is of sufficiently similar character to the steel work for the resin blender, and that subject to one qualification his adjusted B of Q rate makes adequate provision for any change in the conditions that the work is carried out in. I am satisfied that the steel was bought in from stockists and would have been more expensive to buy in by a factor of 10%. As to the modifications I accept Mr Simper’s evidence that the valuation should be based on a day works rather than an “adjusted bills” valuation. This modification work has a significant labour element compared to the other claims.

I do not accept that Mr Wishart’s “costs plus” a fair valuation is warranted in relation to this claim. The claim succeeds therefore to the extent of £229,056.

SCL’s pleaded case is that these claims should be valued in the sum of £223,097. Mr Ian Wishart their quantum expert values them at £129,644, and Egger and its expert Mr Simper at £65,391. There remains in dispute therefore £63,391, I will deal with the elements of this claim.

It is admitted that there was a change in the employer’s requirements, in that the road between Zones C and D was omitted. The quantity experts have agreed liability in respect of this item as a credit of £15,824. There remains the liability issue raised by Mr Simper as to whether £1,111.58 should be deducted from this credit, such that the credit is reduced to £14,713.42. Mr Simper contends that it is not appropriate to value it under this head because it relates to falls to the floor within the Chip Drier which are permanent and not temporary works. SCL has not proved its entitlement to £1,111.58.

Liability for this claim is admitted by Egger. The quantum experts agree in their reports that it is to be valued at £12,995.72. SCL nonetheless contend that the proper valuation is £65,914.55 because the experts based their valuation on a false premise, namely, that access roads should be excluded. Mr Simper in his first report states that he had not valued the claim for an access road as the Liability Judgment decided that roads were not hardstandings and the ROD does not mention them.

ROD 117 was admitted in its entirety. At the liability trial there was no dispute as to the extent of this ROD. The issue that falls to be decided is what area and scope of work was comprehended by ROD 117 and what is its value. ROD 117 records:

The note further records:

From the latter record it is evident that both Egger and SCL included some areas of access in their concept of what was temporary hardstanding.

It is submitted in relation to all areas of “claimed hardstanding” that it was open to Mr Dent to check as to the instructed area and depth of hardstanding. It is evident that he did not. It would impose an unreasonable level of responsibility to expect such detailed checking of all hardstandings. Some quality control sample checks however would not have been amiss. Since the hardstandings were of their very nature and design only temporary, the intensive use and wear in the construction process allied to the elapse of six years or so, serves only to render recent investigations as to the depth and extent of those temporary hardstandings of little value in the absence of contemporary investigation and examination. Furthermore some areas have been the subject of landscaping involving removal or reduction of much of the temporary hardstanding material. It would be wholly inappropriate to approach the question as to the constructed depth on the basis of these measurements nearly six years after construction, where areas have been subsequently landscaped. I accept Mr Bradley’s realistic explanation that a complete removal of hardstanding would not have occurred, there would have been re-grading and partial removal only.

Mr Simper’s view to which Mr Wishart was persuaded is that the access road to the warehouse valued at £56,906 by SCL did not fall within the description in the ROD of “access to workshop and log park” I agree. I accept SCL’s submission that Egger are not on the basis of the pleadings and conduct of this case entitled to go behind the liability finding. The ROD falls to be construed by the court. Access to the Production Hall is not access to the workshop and log parks on the evidence before me. I find that SCL has proved its claim in the value of £12,959.

On the 14^th August 1997 Egger requested further areas of hardstanding for the car park extension and equipment storage for process contractors in accordance with the detail on a sketch 4025/004. The neglect by Egger to look after their own interest and make a sample inspection of this work contemporaneously has led them six years later to attempt an investigation. Where a non degradable material such as terram was used, its position and extent can be ascertained some time after it was said to be employed. It was not found in some trial areas investigated and the inference contended for is that it was not used at all and that an appropriate deduction should be made. The fact that it was claimed for, and not used, may properly found suspicion as to the extent quantity and depth of other materials. Mr Bradley in evidence accepted that where an area had not been redeveloped by landscaping, any depth of material was unlikely to have been substantially reduced. Thus in phase 2 where 300mm was found, the claim for a further 200mm in addition is not made out.

Mr Wishart’s valuation is based upon the most optimistic view of the evidence. Much of the evidence lies buried, but the evidence on exhumation, many years later has warranted a conclusion that SCL cannot prove 500mm depth throughout. Mr Simper’s view is unduly pessimistic. On the evidence, I find that the proper value of this claim is £38,000.

This claim relates to additional areas of hardstanding and car parking. SCL relies upon the evidence of Mr Bradley and Mr Howlett who gave evidence as to the events that occurred on site and the works undertaken. This claim comprises discrete areas 1, 2, 3, 5, 7(A) (B) and (Bi). Mr Gardner gave evidence on behalf of Egger. He was asked about area 2 - the laid down area for the process contractor Wolff. He was not able to assist as to the formation level, and the reduction in levels for landscaping. There was an absence of evidence from persons who might have been directly concerned such as Mr Dent. Mr Gardner was understandably not able to give any first hand evidence of factual matters. As to area 3 he accepted that trial pit 4 was located next to a column base which would have been back filled with 6 F2 in any event. In consequence, he was misled as to the depth of the hardstanding required. Furthermore, the trial pit was not in the position of the hardstanding claimed. I reject Mr Simper’s analysis that certain items the subject of this ROD valuation have been duplicated. I have already dealt with the matters of duplication at paragraph 219 of the Liability judgment. I judge the value of this claim to be £17,901.

This relates to the improvement of access to the lorry holding areas on the South Site including use of 6 F2 fill to the soft spots. Mr Simper sought to go behind the finding in the Liability judgment. I reject his evidence: the claim to the value of £11,344.83 is made out.

This claim relates to the preparation and placing of hard standing to the area to the west of the Chip Drier. It was contended on behalf of Egger that it did not relate to temporary hard standing at all despite my findings at paragraph 221 of the Liability judgment. The hard standing on the east side has, I am satisfied, been subject to landscaping, whilst it has been regraded, I accept Mr Howlett’s evidence that to his knowledge “it went in at 500mm both of them ..”

Mr Wishart values this claim on the basis of Mr Howlett’s evidence. I reject Mr Simper’s view that there was overlap. There is no evidence of this. This claim is properly valued in the sum of £18,105.60.

This claim arises out of alleged works to level the ground, provide hardcore and carry out ground improvements to form a platform for two 400 T Peterhead cranes. Mr Howlett gave evidence, his recollection aided by a photograph showing work being carried out on the 9^th October 1997. Egger contend that the work undertaken does not relate to hard standing. Barr Construction carried out this work as is evidenced by their AWR dated the 20^th October 1997.

This work was part of the more extensive works in connection with the soft spot claim.

Paragraph 230 of the Liability judgment makes it clear that the area of hardstanding contended for was to enable the employment of a crane to lift components for the installation of the chimney boiler flue at the side of the Production Hall. There is no duplication of this claim as submitted. The dimensions shown on the SCL sketch are in my judgment those that can be relied upon. The provenance of Mr Holloway’s is not demonstrated. I accept Mr Simper’s valuation of £1,268.

The claim is for additional stone placed under the defendant’s temporary diesel tank. It is accepted by Egger that the work was done but Mr Simper says that it is already claimed under ROD 179. I reject that submission. The claim is proved in the sum of £555.

Temporary Crane access was provided before concrete slab structure was carried out in 1998. Egger required early access for their process plant contractors, and the instruction was issued to Barr in 1997 to provide areas of hard standing for Egger’s process plant constructors adjacent to the north end of the Hacker. Before the slab works the temporary hard standing had to be reduced to a formation level. I am satisfied that the work was done and the proper valuation is £3,947 and not £3,247.

SCL’s pleaded case is for £63,830 for a total weight of rubbish removed of 3,020 tonnes. The loading and haulage to the tip accounting for £24,570 and tip charges of £13 per tonne for £39,260.

Egger contend that they are only liable for 68 tonnes at £15.47 per tonne. The starting point for the resolution of this issue is the liability judgment, at paragraphs 239 to 266.

SCL’s claims were particularised in detail in each of the RODs. Egger had the opportunity to contemporaneously check the claims and if they were not made out, to respond in terms with denial or qualification. This was not done.

The weight of any evidence as to the amount of rubbish and its origin must be considered in this context. Egger are entitled to test the evidence and in so doing put forward alternative arguments. They have done this through a proper analysis of the tip tickets put forward by SCL in support of its case. In the Liability judgment particular RODs were considered and specific findings made in relation to them. Neither parties are entitled to go behind those findings. They can advance a pleaded case as to quantum if direct evidence is to be relied on or may test the evidence as to quantities. Egger accept that they are not entitled to question the origin of the rubbish and its nature. They are entitled to consider the hearsay documentation comprising many weighbridge tickets and makes submissions on the reliance, if any, to be placed upon this evidence. The tickets are in common form. In many instances the lorries are shown to be heavier when they left the tip than when they arrived. In certain instances the lorries were not weighed on arrival at the tip, and some of the tickets describe the waste material as “rubble”. No direct evidence as to the tickets and receipt of rubbish was adduced from the tip operators or hauliers to explain the significant number of discrepancies. It seems to me that the evidence as to quantity in this claim must be approached with extreme caution. Not least because of the amount of waste allegedly generated by the process operators.

Mr Philipson a conscientious and candid witness who was on site throughout, wryly commented that on the basis of his analysis of process contractors waste:

“A. The simple calculation is, had we discarded the machinery with the packaging, we still would not have achieved 3000 tonnes of waste”.

Mr Wishart proffered the suggestion that the waste might have included steel and other scrap off-cuts enhancing the weight. As one would expect, and as Mr Philipson confirmed, such material did not go to waste when industrious Scot scrap merchants frequently visited the site. Who would incur haulage and tip fees if it could be got rid of for free, or for a small profit?

I do not accept that in the absence of direct evidence as to the operation of the tip, the procedure for the weighing and compilation of data on the tickets that substantial reliance can be placed upon the weight tickets. The information proffered by Mr Philipson related to the weight of the rubbish arising from the packaging and transit supports for process machinery. It gives details of the net gross weight of the equipment delivered, thereby giving an indication of the packaging weight. This evidence relates to three out of 11 process contactors only, albeit the major ones with the heavier and most complicated equipment and plant for installation. The evidentiary effect of this late served information is limited. It would have been of greater effect had comparative evidence been adduced to show what was the weight of the contents of skips that Egger say they provided to process contractors specifically for their own waste. No invoices have been provided. I accept that Egger have not proved an alternative case, they have not pleaded one.

They have effectively tested the evidence from SCL. The court’s function is not to choose between SCL’s case supported by some evidence, or on Egger’s analysis. It is to evaluate the evidence in the light of SCL’s obligation to prove its case on quantum.

ROD 581 is claimed in the sum of £9,867 in the re-amended particulars of claim (RAPOC). On the face of the ROD rubbish removal is shown at £3,978.

ROD 648 is claimed in the RAPOC at £5,412 but the costs of the work on the face of the ROD is only £2,072.

ROD 866 is claimed at £6,725 in the RAPOC but ROD on its face gives a figure of only £2,569.

In my judgment on all the evidence before me I am satisfied that SCL have proved a claim to the extent of £42,000

Egger has throughout accepted that they instructed an upgrade in the compressed air system by up-rating the compressors and extending the ring main.

The original specification included the construction of a compressed air system for the operation of the process plant to be installed by Egger. This system is described at volume 4 of the Electrical and Mechanical specification forming part of Egger’s Requirements at page 8 items I and J:

“The contractor shall provide a compressed air plant to serve the requirements of the productions areas having a system operating pressure of 7 Barr. The compressed air plant shall consist of:

3 Oil injected, rotary screw, air cool compressors each rated at 500 c.f.n. Two duty and one standby.

1 Air receiver sized for the full duty of 1,500 c.f.n. with automatic drain valve piped to drain.

3 Dessicant air driers each sized at 500 c.f.n.

3 Filters each size for 500 c.f.n. to provide content less than 3 mg/m³”

Mr Taylor gave evidence that the original price for three Compair 6125 Compressors, one VR 3,800 Air Receiver and one Dessicant Drier complete with filtration was £59,500. The total of original price for plant of £63,000 includes the costs of off loading, connecting and Scott Industrial Air’s overheads and profit. This evidence was not cross-examined on.

By Kvaerner’s letter to Egger of the 19^th September 1997 Kvaerner confirmed Egger’s instruction to revise the Original Specification and to proceed with:

“The proposed compressed air system would take the form of three compressors rated at 750 CRM complemented with Dessicant dryers, filters and storage vessel. The proposed pipe work will take the form of 80 mm pipe runs to specific process areas as detailed on Egger Schematic drawing (1 copy attached). Spare capacity will be made within the system to add an additional compressor at a later date”.

The size of the compressors increased. As a result of this increase an oil/water separator was required. This Owamat was additional to the original requirements and cost £2,346. Egger’s valuation does not reflect this.

Mr Emmerson Egger’s M and E quantum expert did not deal with the valuation of the plant element in this claim in his witness statement. In cross-examination as to the value of omitted pipe work on day 10 page 113 of the transcript.

“Q. Now what I want to suggest to you, Mr Emmerson, is that if you were to value – if you were to value the omission of the 100 mm pipe work you should value it at £3,354 whether either the quantities the quantities that Baileys have used or the rates that Baileys have used are good, bad or indifferent do you follow?

A. I do, yes, and if we do that then we also have to deduct the rates they have in for the compressors and I think you will find at the present time we have not deducted that amount of money and therefore the actual equipment. We have deducted something substantially less than that. I will be happy to go and do it again at the sub-contract rates, certainly.”

In re-examination he was asked by Mr Davies

“Q. You then referred to a need to adjust the value to be attributed to the compressor equipment?

A. I did, yes.

Q. Perhaps you would explain in a little more detail to what you were referring there.

A. When we were trying to find out the costs of the larger capacity system we obviously phoned the suppliers, Atlas Copco and the like, and we were finding the prices for the increased plant were only very marginally higher than the rates in the bill of quantities to be fair.

Mr Taylor in his evidence as to the original price in my judgment was not intending to say that the Bills of Quantities price of the plant was £63,000 as Mr Simper in cross-examination on day 20 page 190 in the transcript confirmed:

“Q. When Mr Taylor says at his paragraph (i) on 290 ‘the price’ he must mean the price to Baileys or the cost to Baileys, must he not? He cannot be referring to the price set out in the bills because that is clearly a different figure?

A He certainly was not talking about the bills because it was not the rate in the bills.”

Mr Simper’s revised view of quantum for the provision of the up rated compressors and oil and water separator made necessary is based upon Mr Emmerson’s evidence. The information provided by Mr Taylor in his witness statement regarding this plant is that the total cost of the installed plant was £125,000 (£63,000 plus £57,000 plus £5,000) plus profit and overhead. Mr Taylor says that the original price was £63,000 which results in an extra of £65,000 (£57,000 plus £5,000) however, the bill of quantities show that NG Bailey allowed £143,003 including profits and overheads for the plant giving a saving of £11,754 for the cost of the plant. In the cross-examination referred to above he demonstrated the fallacy of his own argument. It depends upon a misinterpretation of Mr Taylor’s evidence. Costs must be compared with cost not cost with price. Understandably Mr Simper who was not approached for a valuation of this claim on the Emmerson basis before, despite time for mature reflection, nonetheless was tempted to leap onto a passing bandwagon thereby conferring benefit upon his client Egger. He was wrong. The proper approach I am satisfied is that of Mr Wishart, recapitulated in his cross-examination on day 19 at page 101 of the transcript:

“There is nothing in what I have actually said that actually contradicts what is in 12.5A. 12.5A allows you to build upon the Bill of Quantities prices to arrive at a new price under different condition or different circumstances, or in this case at different specification. One needs (sic) the original bargain in tact and one simply adjusts up or down on the difference. It is a very simple and very common practice.

The element of adjustment is as set out in Scot Industrial Air’s fax of the 30^th September 1997 entitled “Extra Pricing over Original Contract” whereby they set out the difference in the original price of the plant and upgraded as £62,000.

This element of the claim should be valued at an extra overprice of £62,000.

The plant pipe work and electrics should all have added allowances for testing design and preliminaries and overhead and profit as Mr Simper expressly confirmed in his evidence.

The pipe work should be omitted on the basis of the NGB actual sub-contract values as measured by them based on 78m of pipe work and not 250m measured by Mr Emmerson after the event. This claim is proved in the sum of £122,631 as set out the summary of the makeup of this claim.

SCL’s claim is for the works in ROD 194 which comprises CAR 26 valued by them at £101,511.71, CAR 59 valued at £1,283.84, and CAR 126 valued at £100,765.67. The total value of this claim is £203,561.22.

The principal issue dividing the parties relates to CAR 126. Mr Wishart values this at £63,386 and Mr Simper at £75,060.

Egger originally contended that the original combined system that SCL contracted to supply did not conform to the requirements of British Standard 5306 (inter alia). This court and the Court of Appeal did not accept that view. The changes instructed from a combined system to a dual main system with added Grecon and Minimax system fall to be valued. The omission of the combined system originally proposed must be valued.

Mr Davies on behalf of Egger submits that the approach to the valuation of this claim “must … involve a comparison between what it would have cost to build the system the design which was found, by necessary implication to have been done and what it has cost to build the relevant parts of the system as built.”

Had the instructions to effect the changes not been given SCL would have been obliged to build the unified system in conformity with BS 5306 and the Employer’s Requirements. Had they grossly under estimated the costs of achieving this within the guaranteed maximum price contract, that would have been at their risk. They may well have approached Egger with the begging bowl seeking the difference between that allowed in the tender and the cost of the as built. I have no doubt they would have had short shrift had they done so.

Egger nonetheless seek to take advantage of what they contend is the inadequacy of SCL’s tender allowance. It is submitted that SCL should have included a larger tender allowance, thus enabling Egger now to have the benefit of a bigger credit against the value of the changes instructed. Egger therefore sought to find the Holy Grail, namely, a developed design of the combined system originally proposed, so that it could be properly costed to ascertain the appropriate credit due to Egger. Disclosure did not reveal a comprehensive worked up design. Egger’s expert Mr Hall has therefore produced a notional design which was then valued by Mr Emmerson Egger’s M and E quantum expert. In cross-examination on day 10 at page 120 of the transcript Mr Emmerson demonstrated the difficulty that Egger had created for themselves:

“Q. That may be so, Mr Emmerson, but just stay on this particular point. In the light of the discussion that we have had, what is the relevance of your view, as a quantity surveyor proffering this valuation, of valuing the Hall scheme, which was never so to speak on the table?

A. I valued the Hall scheme because – well, first of all I was asked by Mr Gardner to do it, and secondly we did not know what Skanska had allowed for in their GMP. We had asked for a design but that was not forthcoming so we had to provide our own design.

Q. But is design relevant or is not the relevant question sub-contract value, whatever design underlies it.

A. I think in this case that in order to evaluate the change, you had to know what Skanska should have allowed for. I think the problem with this system is that there is a lot more to the sprinkler system than you actually see on the drawing. This only half of the sprinkler system, because all the range pipes and header pipes are not shown. So to pick up a change you need to know what the original GMP was based on.

This approach gives no weight to the provisions of Clause 12(5):

“(a)

The valuation of additional or substituted work shall be consistent with values of work of a similar character set out in the Sub-Contracts making due allowance of any change in the conditions under which the work is carried out and or any significant change in the quantity of the work set out. Where there is no work of a similar character set out in the Sub-Contracts the fair valuation shall be made.

(b)

The valuation of the omission of work shall be in accordance with the values in the Sub-Contracts or if no Sub-Contract had been concluded the values in the Guaranteed Maximum Price Analysis.”

(emphasis provided)

Both the valuation of the additional substituted work and the valuation of any omission of the original combined system must be consistent with the agreed price not a notional unagreed price.

The omission must be valued by reference to the NG Bailey Sub-Contract value. Egger’s submit that there is no evidence that the contract price of £265,000 is based on the engineering design of the original proposed unified system. It is contended that documents disclosed and lately highlighted by Mr Wishart at the trial give quotations which when properly analysed relate to a ground sprinkler installation. I reject this argument. There is clear reference to an underground main which served both hydrants and sprinklers.

In my judgment CAR 126 is properly valued at £68,386.

The experts are £7,572 apart. Mr Emmerson in his written evidence says that the sprinkler pumps fitted were of a lower duty than those that would have been required for a unified main.

Cross-examination of Mr Wishart was on the basis of the notional Hall scheme or the NG Bailey price in terms of principle and not in relation to detail. Mr Taylor of NG Bailey gave evidence as to valuation which I accepted. In my judgment the proper valuation is £101,511.71. I reject Mr Simper’s valuation.

This does not appear on the evidence to be contentious. I value this claim in the sum of £1,283.34.

This claim is valued at £176,330 and relates to Mott McDonald increased design fees. This is a claim that is to be valued under Clause 12(5) of the Conditions.

In their defence Egger admit that Mott McDonald are entitled to an additional design fee by virtue of the changes to the GMP work or scope. At paragraph 292 of the defence they value the claim at £12,215. The rationale was provided by Mr Gardner in his evidence on day 8 at page 26 of the transcript. The sum was arrived at by taking all the elements of the design work undertaken by Mott McDonald and looking at the changes admitted by Egger and then making a pro rata adjustment reflecting that work based upon the GMP design fee. It follows that this approach does not reflect either the findings in the Liability judgment or agreement between the experts.

A great deal of evidence was given at the Liability trial as to Egger’s conduct in relation to structural design matters. Egger issued instructions which were late, piecemeal, constantly changing and often substantially different to those encompassed by the Employers’ Requirements. I had the benefit of hearing the evidence of Mr Currie of Mott McDonald in the Liability trial who explained the impact of Egger’s conduct upon the process of design, I found him impressive and reliable. His evidence underpins that of Mr Trinder who gave evidence before me in this quantum trial. His evidences suffers from the disadvantage that he was in an elevated and supervisory role and understandably he could not always condescend to a firsthand detailed knowledge of matters put to him. Nonetheless I found him to be a reliable witness as to the overview of this claim, who was able to speak of the impressive system employed by Mott McDonald which categorised the work done by personnel of differing skills, and ensured the close monitoring of these activities by the supervisory management and ultimately by the Directors. There was clearly a substantial overrun warranting the continued employment of staff at all levels. Quality assurance depends upon the proper monitoring and involvement of supervisory staff at all levels. At the Liability trial I characterised the Mott McDonald claim document as framed in a manner most advantageous to them with the corollary that it would be the least advantageous to SCL. This did not imply criticism but acknowledged the commercial realities. This was a fast track project of enormous complexity poorly administered by Egger. The economies exercised in failing to employ sufficient and competent personnel to administer the contract have proved in the event to be very expensive.

A close and skilful cross-examination of Mr Trinder at once exposed his lack of a detailed and comprehensive knowledge of each and every consequence of change, but his appreciation of the overall picture was impressive, and with minor exceptions such as his explanation as to code V and the selection of a prime example of the complexity connoted by that code, the data as supplied by his subordinates was reliable and gave an accurate picture when interpreted by him to the court.

Egger have not presented a positive case. For them to conduct a detailed analysis would have been time consuming and not cost beneficial. It is for SCL to prove its case and not for Egger to propound an alternative case.

Mr Davies’ cross-examination properly established the following matters:

However I am satisfied that proper timesheets were kept, and the claim was a well researched and methodical exercise which was properly detailed and consistent. I observe that it took nine man weeks to produce. It was reviewed by Mr Bert Blyth on behalf of Egger and Mr Trinder. Mr Simper has not valued this claim at all. There is evidence of Egger’s differing approach on two substantial professional fee claims, that of AJSP, the architects, and Mott McDonald the design engineers. In respect of the AJSP claim, Egger have settled this directly with AJSP. Rather than addressing each of the specific changes that occurred Mr Gardner agreed a percentage uplift of about 20% to the AJSP March fee. Although AJSP was novated to SCL Egger negotiated AJSP’s claim for additional fees directly. The pro rata settlement of AJSP’s claim was on the basis of a GMP of £14.5m.

The percentage uplift admitted by Egger in respect of the Mott McDonald claim is one tenth of that paid to AJSP.

There is no explanation as to the massive difference in the percentages allowed. The numerous process plant drawings issued would have had little or no effect on the architectural design, but would impact substantially on the Mott McDonald design.

I have taken account of the justifiable criticisms by Egger but conclude that this claim is justified on the basis of the conscientiously recorded data.

In my judgment on the evidence the proper valuation of this claim is £150,000.

This schedule is divided into 39 Work Packages. Of the 1,700 pleaded items the majority have now been resolved, and 35 remain outstanding either as to liability or quantum and three as to both. SCL’s pleaded case values these claims at £1,546,746. The expert Mr Wishart values them at £1,437,688 because he deducts from SCL’s claim £43,930 for conceded Egger counterclaims. Mr Simper, Egger’s expert values this claim £1,056,740 but had not by the end of the oral evidence made any deduction for the Egger counterclaim.

The SCL claim started off £2.9m and although termed ‘Minor items’, many of them are substantial including claims approaching £100,000. Mr Holloway, SCL’s former quantum expert who retired in 2002 agreed items to the value of £921,779 and this agreement is binding upon the parties following the conditional permission given to employ Mr Wishart and the agreement of the parties. Throughout the trial the experts in every discipline involved have made commendable efforts to achieve agreement on a rolling basis.

In relation to each of the claim put before it by SCL in the claim, and by Egger by way of counterclaim the Court must consider all of the evidence put before it by each of the parties who must prove their case as to each claim upon the evidence.

In respect of many of the ROD’s SCL invoke Clause 4(3) of the Contract which made provision for the issuing of instructions:

“All instructions issued by the employer shall be issued in writing. If the Employer purports to issue an instruction otherwise than in writing, it should be of no immediate effect, but shall be confirmed in writing by the Contractor to the Employer within seven days, and if not dissented from in writing by the Employer to the Contractor within seven days on the receipt of the Contractor’s confirmation shall take effect as from the expiration of the latter said seven day. Provided that the Employer within seven days of giving such instruction otherwise than in writing it shall himself confirm the same in writing, then the Contractor shall not be obliged to confirm as aforesaid, and the said instruction should take effect as from the date of the Employer’s confirmation”.

This system was refined by ROD system, and further modified by the parties at a meeting on the 30^th April 1997. The agreed procedure was confirmed in SCL’s letter of the 8^th May of 1997 to the effect that a change should be instructed either in writing or orally subject to confirmation by ROD with the ROD being accepted as accurate unless dissented from within seven days by Egger.

In respect of many of the Minor Items SCL rely upon those ROD’s issued to Egger which were not the subject of dissent within the prescribed seven days. They rely upon the ROD as being an accurate record of an instruction pursuant to Clause 4(3) as modified by the parties as giving rise to an entitlement to payment, where a change is recorded. Further reliance is placed on paragraph 245 of the Liability judgment (relating to rubbish removal), where it was observed that Egger had the opportunity to contemporaneously check the claims, and respond in terms of denial or qualification. Mr Williamson contends that full weight must be given to the contractual mechanism effected by the parties and where Egger five years after the event rather than seven days envisaged by the contract seek to deny or qualify, it should not be permitted to do so under the contract. Mr Williamson submits that Egger’s defence as to liability in respect of those items where they failed to respond contemporaneously should be dismissed.

I do not accept that submission. The contract does not provide for such a mechanistic approach, deeming the detail of an instruction irrebuttable proof of the matters recorded whether carefully or not. Instructions form part of the body of evidence that the court must consider. That a qualification or denial comes long after the event, or from someone who has no direct knowledge of the matter may lead to the conclusion that the denial or qualification is of little or no weight, and that the only reliable evidence as to the extent of quality of the work done, or materials supplied, is that evidenced in the contemporary document.

This claim relates to alleged damage to scaffolding. The ROD was raised on the 26^th November of 1997 and no response was delivered. However, on the 4^th November of 1997 there was a letter written by Mr Dent clearly dealing with the incident and proffering a plausible alternative explanation. SCL submit that in the absence of a seven day response the claim is time barred. SCL’s claim is not proved, I reject it.

ROD 21.9 instructs:

“Main switch gear for small power to be in switch room KCL to advise on size and preferred location.”

The tender allowances record

“Item ROD 21 High Voltage – transformer rooms allowed but only two HV switch rooms

The Employer’s Requirements and the employer’s drawing AJSP 505 Revision G calls for three switch rooms. At the final post tender meeting of the 17^th April 1997 KCL advised Egger that only two switch rooms had been included in the GMP. In consequence additional H.V. switches were required.

The Liability judgment at paragraph 288 dealt with liability not quantum. The final sentence of paragraph of 288 states:

“In my judgment liability is established for the costs of the additional switch room and switch gear.”

It did not go on to say “In the sum of”, the questions as to the extent of the work covered by this ROD and its costs were left at large for the quantum trial.

NG Bailey and Company in January of 1998 produced a document entitled

“Lump sum description of works based on NGB design and agreed work scope for Electrical and Mechanical Installation”.

The summary at item 9 refers to H.V. installation with a breakdown under Work Section 8. It is evident that 3 no. 4 panels at a cost of £32,934 per unit of four were to be installed. The Employer’s Requirements were for 1 no. 4 panel and 1 no. 6 panel. Mr Emmerson’s concession in cross-examination at the Liability trial that an extra switch room as well as the additional switch gear was also included in ROD 21.9 was unthinkingly generous.

I am satisfied that the extent of the change was two additional H.V. switch panels. The cost of these, pro rata if £98,000 represents the costs of 12 would be £16,450 per panel.

The gas suppression unit is an agreed change valued at £2,600.

I value this claim therefore upon the evidence before me in the sum of £19,050.

This claim relates to the cost of non combustible cladding to the roofs and walls supplied by TM Devon a sub-contractor. Mr Wishart agreed with Mr Johnson of Turner and Townsend Egger’s quantity surveyors that the change resulted in a saving. The value of this saving is agreed between the quantum experts at £21,099.78. This claim is proved in that amount.

Egger instructed SCL to cease work and dismantle scaffolding in switch room four to allow process contractors access. Egger denied responsibility and relied on a letter of the 16^th October of 1997 saying that SCL were causing delay.

No response was received to the ROD dated 26^th November 1997 but the letter of the 16^th of October 1997 has relevance and is contemporaneous. I conclude that SCL has not proved its claim, I reject their claim therefore.

This is a disruption claim in part, and the claim for damage allegedly caused by a process contractor. The events giving rise to the claim were on the 1^st November 1997. The ROD was raised on the 26^th November 1997. The contemporaneous memorandum enclosed evidence both as to damage and disruption. The claim is made out in the sum of £398.

The claim is for additional delivery charges in relation to the Siemens Transformer Equipment. The SCL claim is in the sum of £27,740 of which Egger accept responsibility for £21,000. At issue therefore is £6,740 which arises because the cost of two deliveries were incurred.

SCL by their letter of the 3^rd July 1997 placed the order for six transformers, three to be delivered 22^nd - 30^th September and the balance 25^th – 30^th October. The order was taken up by NG Bailey the sub-contractors. The order followed a cost analysis produced by Mott McDonald on 26^th June 1998 which factored in the delivery costs. It is evident that the original delivery dates were lost because a manufacturing slot was missed.

Alternative dates were given. It is not the case that the missed slot led to the necessity of two deliveries. This arose for other reasons. SCL’s case is that the requirement for two tranches was due to Egger’s requirement to have one of the switch rooms completed in advance before the others were built. It is not supported by any evidence. SCL has not proved its claim for additional charges for delivery.

This ROD dated the 8^th December 1997 is in the following terms:

“Change in requirement

Mechanical and Electrical

On the 28^th November 1997 Kvaerner wrote to NG Bailey the M and E sub-contractors –

“Egger (Barony): FELIX II

ACCELERATION MEASURES

The relevant passage in the letter of the 2^nd December 1997 referred to in ROD 424:

“In conclusion we confirm your verbal instruction on Friday 28^th November 1997 to accelerate the works in line with the proposals contained within our letter 1920 dated 26^th November 1997 and afford all costs incurred in do so for reimbursement by yourselves.”

Both Mr Simper and Mr Wishart have given evidence, by way of their reports and to the court orally. There is a difference between their assessments of £60,424.31 reflecting their different interpretations of paragraph 9 of the Acceleration Agreement and its resulting application to the facts of this case. It is accepted that this is conveniently set out in the letter to Egger of the 26^th November 1997 which I set out below.

Mr Wishart has proceeded on the basis that the 25% non productive overtime uplift applies to all outstanding hours worked, that is those in the “normal working day” and overtime hours on top.

Mr Simper regards the uplifts as applying to both the normal working day hours worked and, to overtime only where they are sequentially worked. If an operative on a given working day works his normal hours without additional overtime, then no uplift in his view is justified. He made reference to the research of Professor Malcolm Horner from Dundee University, which indicates, he said:

“The actual efficiency factor – he actually, I think in his survey came to 26% and you reach that after six weeks of continuous overtime …”

Mr Wishart also made reference to Horner’s work. However that research evidence was not produced to the court. A fall off in efficiency may be affected, by many considerations such as the type of work being done, the length of the normal working day, including overtime worked and working conditions. For what it is worth both Mr Wishart and Mr Simper accepted that the non productive overtime uplift should attach to both the normal working hours and the additional overtime hours worked.

Mr Davies submits that Mr Simper’s view is correct. That is to apply the 25% uplift only when normal hours and overtime are worked sequentially, otherwise there could be compensation for reduction in productivity when none actually occurs, because the operative was only working normal hours on a particular day and with no overtime. That does not necessarily follow. If on the preceding day normal working hours were worked and long hours of overtime added it could have some effect on the efficiency of the operative on the following “normal” working day, and if the regime is of such mixed days over a period of time, there could be cumulative build up of lost efficiency. In my judgment Mr Simper is in error, the uplift to reimburse their “reduction in Productivity” was to be “based upon 25% of the outstanding working hours”. This does not mean additional overtime hours or additional overtime plus normal hours worked on the same day, it relates to all of the working hours outstanding. The uplift must be applied to all hours worked.

There is a further issue between the parties as to the scope of the acceleration agreed by Egger and SCL. Egger contend that it did not extend beyond the 2^nd February. Both Mr Taylor and Mr Percy said in evidence that both Mr Bradley and Mr Tranter gave verbal instructions to continue, which instructions covered the period 3^rd February 1998 to the 16^th February 1998. NGB in their plaintive letters of the 11^th March 1998 and the 9^th September 1998 referred to oral instructions but complained of the absence of written instruction from SCL confirming the oral instructions and calling upon SCL “to honour your verbal instructions”. No such instruction in writing in fact was given. NGB felt that they needed a further one. They had received letters dated 28^th November 1997, 18^th December 1997, 8^th January 1998 and the 12^th February 1998 from Kvaerner covering four periods ending with the 2^nd February 1998. It is evident that NGB continued to execute the acceleration measures between the 3^rd February and the 16^th February 1998 that had been agreed throughout. Mr Simper in his evidence emphasised in cross-examination on day 22 page 113 of the transcript that the written instruction between SCL and NG Bailey only went to the 2^nd February, and expressed the view that if NGB worked on the basis of an oral instruction it would have to be endorsed by Egger “.. we really effectively have two different agreements here, one between Skanska and NG Bailey and one between Egger and Skanska, they are not back to back that is the problem”.

He is partly correct save that there is no problem. There was an effective agreement between Skanska and Bailey which did not expire on the 2^nd February. There is a separate and effective agreement between Egger and Skanska evidenced in the letter of the 26^th November 1997, which recites that all outstanding working hours were the subject of the agreement, and there was no cut-off date as to when these works had to be completed by. I find that the agreement related to the whole of the works between the 3^rd February and the 16^th February 1998. Mr Simper fell into the trap that he identified and failed to consider the separate agreements, and confused himself by attributing his misinterpretation of the terms of one to the other.

Mr Simper excluded staff costs on the basis that they were not normally covered by NPO agreements. He accepted that the letter of the 26^th November contained no such limitation, and accepted the staff included were paid at hourly rates. They were of course staff who were operatives with a supervisory role. I am satisfied from the evidence of Mr Taylor that the cost of other staff has been properly stripped out of this claim, because the reference to the working rule agreement which does not include such other staff. Mr Wishart confirmed that such deductions had been made in his valuation.

Paragraph 8 of the letter of the 26^th November provided that NG Bailey would produce weekly record sheets to verify their costs. Mr Simper in his cross-examination claimed that signed timesheets from a number of operatives had not been provided. The quality of some of the photocopying of timesheets was poor. It is evident that the copying machine had permitted several sheets to go through the copier together, and caused reproduction in a mangled form with incomplete text. Recourse to the originals show that the requisite timesheets had in the main been provided. Mr Percy in his written evidence said that time and material sheets were supplied and Kvaerner signed and returned some to NGB, they did not sign and return all of them. A labour cost analysis was later produced supplementing and substantiating the details contained in those sheets. These would of course be based on signed timesheets as well as other documentation relating to materials. I am satisfied that there was sufficient compliance with the obligation imposed in paragraph 8 which related to all costs including labour and materials.

Mr Simper’s misgivings as to the inadequacy of records are not borne out. I accept the evidence of Mr Taylor as to the sub-contractor in relation to the NPO claims. The matters raised by Mr Simper have helpfully formed part of the testing of SCL’s evidence. They have proved their claim. I am satisfied that Mr Wishart has properly quantified this claim. I accept his evidence. For the reasons I have indicated I reject the evidence of Mr Simper. This claim is valued at £167,620.90.

This is a claim for relocating a valve set. The uncontradicted evidence of Mr Bradley is that the position of the valve was shown on a drawing dated 15^th September 1997. There was no Egger comment as to its location. They subsequently required it to be relocated after installation. This claim succeeds in the sum of £800.

This is a claim for an increase in the length of handrails to the stairs. Mr Bradley’s uncontradicted evidence supports it. The claim succeeds in the sum of £152.47.

This claim stems from the size of the Pump House being increased to accommodate an additional pump set. Egger have accepted throughout liability resulting for this change. The size was increased from 8m x 6m to 6m x 12m. The height remained the same as originally proposed. Mr Simper’s evidence is that the “true cost” of the change is £20,260, and because there is tender allowance of £14,400 there is due a further £5,860. Mr Wishart is of the view that the basic price of £20,260 relates to the superstructure only. He referred to an invoice of building works, which he said did not include the excavation of floor slab with provisional concrete bases, or electrical installation.

There is no evidence as to what it did cover.

Mr Simper uses a tender allowance of £14,400 based on SCL documentation provided to him by Mr Holloway, SCL’s previous quantum expert. A breakdown sheet in the hand of Mr Bradley shows a tender allowance of 48 square metres of £14,400 and a revised requirement reflecting 72m square at £21,600, each square metre therefore being £300.

I do not know what the tender covers: I am not told. It does not indicate superstructure only. SCL has the burden of proving its claim, it is not the role of the court to engage in metaphysics. Mr Simper’s stab at rationalising the meagre facts is open to the same criticism as Mr Wishart’s, I reject this claim.

This claim relates to the changed requirements for the Control Room Screen in the Production Hall. Mr Wishart on behalf of SCL values the claim at £35,998, Mr Simper says that far from monies being due to SCL a credit of £18,943 is due to Egger. Egger required a Control Room Screen of full width, double-glazed, overlooking the Production Hall. Internal viewing glazed panels were required between the Control Room and the Production Hall. The AJSP Tender drawing 560A require that it should be 2100mm high on a 400mm sill with power coated steel frames. SCL allowed for a screen therefore, some 28m long by 2.1m high which at a rate of £189.9 per metre gives a tender allowance of £11,180. Since the tender quotation made an allowance for half the windows to open and this was found not to be necessary, the rate was revised downwards to delete the opening window allowance. The General Design Criteria of the Building Works Specification provided:-

“The Contractor is to ensure that the design as proposed by himself meets the requirement to the following bodies

(a)

Fire Officer”.

There is no evidence that the original design did or did not meet the fire officer’s requirements.

The screen that was built followed the AJSP specification based on Egger’s requirements, which are conveniently set out in a faxed memorandum dated the 29^th August 1997. Performance requirements such as blast resistance and shatter resistance in the event of an explosion, thermal resistance due to high temperatures, sound attenuation and raking to minimise glare were prescribed. The plasterboard partition above the glazed screen was also detailed to have similar properties for the glazed screen. It is obvious that whilst the as built screen did not incorporate every requirement referred to nonetheless, it was so particular as to its up rated requirements that the final design was not that of SCL. This is reflected in the estimated greatly increased cost of £50,000.

In terms of valuation there are three substantial differences between the tender proposal and the as built, namely, the additional doors DB49 and DB55, the additional window WB 16 and the increased fire rating. Mr Johnson of Turner & Townsend gave evidence on day 12 and confirmed the requirement that the screen was to be one hour fire resistant. I am satisfied that this requirement was a change introduced by the fire officer on the 4^th September. I reject Mr Johnson’s spirited advocacy on behalf of Egger contending that it was part of the obligation of SCL to satisfy the requirements of the fire officer in accordance with the General Design Criteria because the final design was not that of SCL. The final design was very much that of Egger. I am satisfied by the evidence of Mr Bradley that the tender build up produced a proper and realistic tender allowance. I reject Egger’s submission that it was far too low. There was an interesting issue as to the comparative pricing of steel framework in the original specification compared with power coated aluminium. It turned out there was no material difference.

SCL are entitled to be reimbursed the costs of the up rated screen in the sum of £47,244. Credit is due in the amount of the tender allowance of £11,245. I am satisfied on the evidence that this claim should be valued at £35,998.96.

This claim is for the reinstatement of protected boarding to the structural steelwork after removal by Egger’s process contractors. Mr Bradley’s evidence stands uncontradicted and clear, I accept it, this claim succeeds in the sum of £224.

This claim relates to work associated with the reshaping and grading of the bund left by APC. Liability for the reshaping element is accepted by Egger who value this claim at £1,862. It was APC’s obligation to create and shape the bund. The reshaping was clearly not within the GMP. The issue arises – was the associated landscaping the contractual responsibility of SCL or others? The Elemental Performance Schedule and detailed design criteria at item 23 contain the following:

“Landscaping: The Contractor is to develop the landscape brief as shown on the drawings, however he is not responsible for providing the works.

Planting/Landscaping works to the south part of the site between the car parks and public road.

Mounds and bunds are to be prepared for tree planting by others

Tree planting will be carried out by the Employer direct. The contractor shall carry out all preparatory work ready for tree planting.”

(emphasis provided)

It is clear that in relation to the bund in question there was no contractual obligation to prepare it for tree planting. Trees were meant to be planted in discrete holes as appropriate in the prescribed 600mm depth of top soil by the employers. In areas other than mounds and bunds SCL had the responsibility to prepare for tree planting. The requirements for the preparation for tree planting is distinguished from the requirement for the preparation for shrub planting in 400mm of top soil and that for grass sowing in 100mm of top soil. In my judgment there was no obligation upon SCL to place 600mm of top soil either over the whole mound or on any part of it. The practicality of planting trees on a 2:1 recently formed slope of sub soil with an imported overlay of top soil is not a question for me to determine. In relation to the provision and deposition of a required depth of top soil or ensuring a depth of top soil, it seems to me that this was not part of the general landscaping obligation of SCL under the contract. Thus in relation to the reshaped bund in question the obligation was for 100mm if grass or if mixed grass and shrubs discrete areas of 400mm mixed with 100mm. The so called relaxation letter relates to other areas of the site and top soil requirements which are not relevant to this claim. I reject Mr Johnson’s approach to this valuation because it is formulated on the mistaken basis that there was an obligation upon SCL to provide a depth of 600mm of top soil to this precipitous bund, and that Egger are entitled to an appropriate credit. The contractual requirements sensibly reflect difficulties in tree planting in such circumstances and imposed the obligation as to the preparation for tree planting on others. The question arises what of shrub planting? There is no cogent evidence before me as to the suitability of the reformed mound for such planting at the time of its formation or of any requirement for additional top soil. In any event I am satisfied that it was originally intended to be a grassed mound, as Mr Dent impliedly confirms by allowing for 100mm of top soil. In the five years since its reformation more imaginative proposals may have been pursued. The value of this claim in my judgment is limited to the costs of regrading and shaping of the bund. Mr Howlett gave evidence as to the extent of the work carried out and I am satisfied the proper value of this claim is £13,005. I accept Mr Wishart’s valuation as to the amount of the claim, based upon the firsthand observations of Mr Howlett.

This claim arises out of a cleaning operation undertaken by claimants in the warehouse on the 15^th January 1998, the claimants allege that the area had been cleaned by SCL in accordance with the contractual obligations but in consequence of further activity by Egger’s process contractors it had to be cleaned again when otherwise that would have not been necessary. Messrs Holloway and Simper agreed that this was a loss and expense item. The valuation of Mr Wishart of this claim is in the sum of £3,792 which has not been accepted by Mr Simper. I value this claim at £3,792.75.

This is an Egger claim for a credit, because it is alleged protective clothing was not supplied by SCL in accordance with their contractual obligation. It is said that a hard hat and Wellingtons should have been provided for the use of Turner & Townsend personnel. One would have thought they would have carried their own in the boot of the car. There is no letter of complaint. I am satisfied that they were purchased. The appropriate goods received log has been produced and the requisite order form. Mr Bradley says they were purchased and were available. I reject this claim for a credit.

This is a claim for delay and disruption alleged to have been caused to the pre-cast curb installation work. Mr Simper and Holloway originally considered this as a loss and expense item. Mr Simper did not value it. However, in cross-examination he conceded that it should be valued and agreed Mr Wishart’s valuation at £5,207. I accept this evidence and value the claim at £5,207.

This claim is for the provision of cast in edge angles. The claim is valued at £5,144, which was the value agreed by Mr Holloway and Mr Simper. Egger dispute the liability for this item. The resolution of this issue depends upon the interpretation of a note on the tender drawing to the effect that the angles were to be provided by the customer. It is Egger’s case that by supplying SCL with the drawing it was apparent that the note indicated to SCL that they were to obliged to undertake this work. Mr Bradley gave evidence that the item related to a beam that had to be cast into a pit wall. Egger were responsible for steel work in other areas of the plant and SCL were not the only party undertaking steel work. Egger and the process contractors were ‘the customer’, I am satisfied that this was not work within the Employers’ Requirements. The claim succeeds in the sum of £5,144.

This claim is for costs associated with the change in height of cast in items to the Hammer Mill pit. Quantum is agreed in the sum of £926 subject to liability. The evidence on behalf of SCL is that of Mr Bradley. It is not contradicted. The claim succeeds in the sum of £926.

This claim is for wasted costs associated with an alleged Employer’s Instruction to change the height of cast-in steels connected with the Pallman frame foundations identified on tender drawing 8901/4/308. Mr Johnson from Turner & Townsend when cross-examined as to this item said that he was aware that Egger had provided the frames and Skanska were requested to cast them in. The detail in the drawing relied upon by Egger was in a drawing indicative of ducts. I am satisfied that originally SCL were to provide the steel plates and that they were in fact procured and delivered to site. Subsequently Egger provided further plates, I am satisfied that Egger is liable under this claim in the sum of £1,846.

This claim relates to an alleged change in the Employer’s Requirements for bull head rails to the Sawdust Hall and Wet Chip area. Egger maintain that this ROD duplicates ROD 63, which its expert Mr Simper accepted in cross-examination related to doors. Mr Simper maintains that the requirement for bull head rails was clearly shown in relation to the Hack Chip Pit and that Egger is only liable in relation to the Sawdust Feed Pit. A sketch issued on the 25^th May 1997 states

I am satisfied that where a Contractor such as SCL are dealing with an Austrian client with drawings originating from German process contractors that such a note albeit in German gives express notice of the requirement. SCL submit that the finding at paragraph 326 of the Liability judgment dealt with an ROD which has a number of component parts and that the liability finding related to all parts. Mr Williamson submits that Egger cannot challenge that they are not liable under ROD 451.1. They are entitled in relation to quantification to make submissions as to the extent and cost of matters covered by ROD 451. It is one of those occasions where there is an inevitable degree of overlap between matters of liability and quantum assessment. In my judgment Egger have demonstrated that the extent of the work in ROD 451 giving rise to a recovery is only in relation to the Sawdust Feed pit. SCL’s claim is made out to the extent of half the agreed valuation, namely £5,640.

This claim is for the cost of plinths constructed in the pump house as a result of the revised requirement for the Grecon and Minimax systems. Egger no longer dispute this claim which was valued by the quantum experts at £1,151. I accept their evidence to the value of this claim in that sum.

This claim is for the costs associated with increasing the size of the Minimax drain. I accept the evidence of Mr Philipson that SCL’s concreting work was premature, it had to be broken up to lay the drain. They should bear the cost, and this claim fails.

The Employer’s Requirements specified that drainage channels were required at all external production access and egress doors. A clear distinction is drawn between all doors and production doors. The channels were not constructed because they would have led maintenance difficulties. Mr Johnson valued the omission giving rise to an Egger credit and assessed the savings at £31,892. Mr Wishart’s valuation was in the sum of £18,325. Mr Johnson’s approach was flawed because he included all the vehicular doors across the site and not merely those in the production area. It also failed to take into account an allowance for the cost of the concrete placed in lieu of the channels. It was argued by Egger that a further credit should be allowed for an omission in respect of drainage conduits relieving sumps associated with the general drainage at points of access and egress. The sole relevant issue remaining between the parties on the evidence is that relating to the length of the omitted channels. Mr Simper says 118m, Mr Wishart 178m.

I value the net omission at £18,325.86 giving a credit to Egger in this sum. I accept the evidence of Mr Wishart who proceeded on the proper premises. It is evident that Mr Simper took an unjustifiably wide view of the drainage requirement.

This claim is for the costs associated with damage caused by Transco works onsite, and the necessary reinstatement work. Transco were Egger’s sub-contractors and installed the gas supply. The claim relates to replacing areas of reinstatement and regrading the East road. Originally the main was to have come into the site from the north, but it was changed to a southern approach and additional works were required therefore to the East road. The complaint was made by SCL on the 19^th November 1997 and was put in writing on the 1^st December 1997. Mr Bradley in evidence confirmed SCL’s claim from his own observation and knowledge. These were clearly additional works. His evidence stands uncontradicted. The works were not within the existing contractual obligation of SCL. The claim was valued by the experts in the sum of £3,295. I accept this evidence and find the claim is proved in the sum of £3,295.95.

This is an associated claim to ROD 425, associated with work done by a service company. Additional work, it is said was made necessary to the sub-base to the road between the workshop, Production Hall and Chip Grader and Sawdust Hall where there was some removal of a soft area and regrading. Mr Bradley confirms that such work was needed and done. I accept that the formation level was lower in consequence of the service company’s workings and had to be made up. The cost according to the experts was £2,659. I accept the evidence and value this claim in the sum of £2,659.68

The claim is for the costs of repairs to curbs allegedly damaged in the laying of the gas main, this is agreed at £151. I am not satisfied on the evidence on the issue of liability and I reject this claim.

This is SCL’s claim for £4,292 for damage alleged to have been done to curbing by Egger’s sub-contractors when trafficking their fork lift trucks and tractors up and over the curbs and thereby dislodging and damaging them. Egger say that the curbs were defective in the first instance. Mr Bradley gave direct evidence of the abuse of the curbs and instanced an occasion when a fork lift truck lifting deposited stacks of condemned chip board went into the curbs and reversed forcing them outwards. The evidence as to the cause of damage was confirmed by Mr Howlett. I accept this evidence. I reject the submission that the curbs were defective or badly constructed. This claim succeeds to the sum of £4,292.

This is a claim by Egger for a credit on the basis that a footpath shown at tender stage was omitted. There is no evidence that it was. This claim is dismissed.

This claim is for additional costs associated with the change of the type of crane in the workshop. Liability and quantum have been agreed by the experts. I accept their evidence, the claim therefore succeeds in the amount of £9,200.

This is a claim by SCL for the costs of additional work to incorporate changes to doors in the warehouse. The principal change was to the door DF8 which was moved to enable it to be centred with the finishing line. The works were instructed after the steel work and cladding had been installed. Mr Simper has valued the work on the basis of adjusted Bills of Quantities rates. Mr Wishart on a day work basis. There was a modest amount of steel involved, but Mr Wishart did not accept that a tonnage rate of £1,008 per tonne for the steel installed was appropriate. He emphasised that the bulk of the labour was in the adjustments and detailing and in taking down part of the structure and the removal of columns and propping of the roof. This was labour intensive work carried out by Kvaerner Cleveland Bridge and paid for by SCL according to the evidence of Mr Bradley which evidence I accept. Mr Johnson also understood that Kvaerner Cleveland Bridge KCBL had been paid. Mr Simper’s over cautious view as to the timesheets and documentation was not justified. It is clear that Mr Green in the Liability trial verified the fact that records were signed off by him and he confirmed that they were accurate. It is hardly surprising that there were no invoices for new steel being used, because little was. The work was that of adaptation and remodelling using in part existing materials. I am satisfied in this case that a day works valuation is the proper one. I reject Mr Simper’s valuation. I accept Mr Wishart’s. I value this claim in the sum of £26,314.61, I am satisfied that there is no duplication in this claim with those matters claimed in ROD 1026.

This claim relates to an increase in the guttering width of the western elevation of the Production Hall and West Chip and the east elevation adjacent to silo 12. Liability was admitted by Egger. The agreed valuation of the experts is £13,672.34, I accept this evidence and value the claim in that sum.

This claim relates to the change of the Workshop doors. The opening width was adjusted to accommodate roller shutters. Mr Wishart values this at £15,259, Mr Simper at £8,303.95. The work was undertaken by KCBL. The account in the sum of £162,263 has been paid. The day work record sheets were checked and approved by Mr Green. Turner & Townsend’s original costing of these changes was to give Egger a credit in the sum of £150.15, but they and Egger had based their valuation on the basis of the work being known about prior to the design and fabrication of the building structural steel. Egger was afforded access to the Workshop (Zone A) on the 4^th August 1997 when it was accepted that the building was not complete, but the steel frame and cladding were. This ROD was raised on the 15^th August 1997. The work involved the removal of the fitted steel work to accommodate the Employer’s original Requirement and replacement with new steel work for the newly specified doors. Egger’s valuation of this issue I am satisfied ignores the actual circumstances at the date of the instruction. I accept the evidence of Mr Wishart that he has seen the day work record sheets signed by Mr Green and initialled on behalf of SCL. These give a labour element of £13,872. In addition there are a site overhead project team costs and overheads justifying a 10% uplift giving £15,259.92. Mr Simper’s report baldly proffers a valuation of £8,303. I accept the evidence of Mr Wishart, and Mr Bradley. I value this claim at £15,259.92.

This claim is for the additional costs associated with a modification to steelwork in the control room. Kvaerner Cleveland Bridge Limited have been paid £28,122 for this work. Mr Bradley in his written evidence states:

“SCL has provided the Q.S. with a copy of the accounts submitted by KCBL for this work. This account has been agreed and paid in the sum claimed.”

Mr Simper has considered the detailed account. The steelwork and fabrication figure of £12,328 he rejects because he says there is nothing to corroborate the valuation as to the extent of the work claimed. He contends that even if it does, it relates to the weight of steel for the whole screen, not merely the modifications. Transport and painting costs are scaled down by him. He has allowed £2,000 for the steel plus 20%, and £2,000 for its erection. This was not of course a first time erection on a clean site.

An invoice from Maval Engineering Company relates to fabrication costs associated with this screen. Whether it relates to the off-site fabrication of the whole screen or modification of it is not clear. Mr Wishart, as the detail of the work actually carried out, is wholly dependent upon the evidence of Mr Bradley which in this respect is devoid of detail. I am not prepared to conclude that because the bill was paid that the party who authorised the work must have checked the accuracy of it. The onus of proving the extent of the work claimed for, labour and material supplied is upon the claimant SCL.

Mr Simper presents the other pole in the argument. A conscientious Q.S. on site in a complex fast track project would temper the requirement for strict proof with the exercise of a robust common sense. If every party insisted upon the strictest compliance with the contractual provisions of its contract, in the resultant “work to rule” no buildings would be built, or any project finished. Mr Simper’s assessment of the amount of steel used, and hours, in my judgment is unrealistic. It represents the first stage in a valuation where little proof is offered, by valuing the work so low to provoke the provision of further documentary proof. The court must consider each claim separately on the basis of what evidence there may be. It is not a mechanistic exercise by the court choosing one party’s valuation or the other. I find that the labour and materials were £14,439.

This is a claim for the costs of steelwork associated with the additional penetration caused by the process contractors to the already erected structures when installing process plant. Mr Simper follows his adjusted B of Q rate approach and values the claim at £4,602, Mr Wishart on a day work basis values it at £11,242, being Change Number 117 at £8,650 and Change Number 82 at £1,569 plus 10% on costs. I am satisfied that the approach of Mr Wishart is appropriate to this claim and I accept his evidence. I value this therefore at £11,242.42.

This is a claim covering the costs of re-erecting steelwork removed by Egger’s process contractors in order that they could install process equipment, in both the Chip Preparation building and Chip Grader. To the extent that the work had to be re-done it was a duplication of work that is the subject of Change Notifications 97 and 99. In respect of this claim the approach of Mr Wishart is the appropriate one: a mere readjustment of the bills of quantity valued is not justified, I accept Mr Wishart’s evidence, I value this claim at £8,225.

This claim is divided into three parts. These relate to soft spots, the achievement of Californian bearing ratios and work done in the Production Hall with the miscellaneous claims associated with it.

An amount of £2,915 is claimed. It is to be noted that this figure relates to the excavation of trial holes for CBR testing. I agree with Mr Simper that this has not been demonstrated as relating to the soft spot removal.

This claim is valued by Mr Wishart in the sum of £103,500. There is a dearth of direct evidence as the exact extent location of this soft spot. SCL rightly observed that Egger did not put forward a positive case. They did however test the evidence by which SCL seek to prove this claim. Whilst they did not adduce evidence in support of a positive case, in the absence of an admission this does not relieve SCL of its obligation to prove its case properly.

Mr Howlett had direct knowledge of the location and extent of the soft spots. In his 12^th May 1997 meeting with Mr Dent he noted one in the north log park and “one large area of very soft material (approximately between grids 315 and 275 at the time of the proposed west access road) …” Mr Bourke, a surveyor employed by Mott McDonald in the Liability trial gave evidence that he had noted in his diary on the 28^th May a large soft spot that overlapped the Warehouse Chip Drier and Chip Grader. Referring to the RBJ survey which mapped the boundary of the area of the soft spot he observed that the boundary selected by Kvaerner related to the surface condition. Where the West road was being constructed, he noted that there was a piece of equipment entrapped. There was approximately 1.2m of soft silt slurry overlapping 0.3m of soft coal washings. Mr Howlett taking the history further in his evidence said “the proof of the pudding of the soft spot comes when excavating and we found that it extended much further ….. north than indicted on the surface condition”.

I accept that the area of this soft spot was larger than the estimated area of the RJB recorded boundary on the surface. There is no reliable direct evidence as to how much larger. Mr Wishart it appears, has had conversations with Mr Bradley and deposes as to a further area. This is an approach to the proof of a significant part of a claim which one can only characterise as casual. I cannot attach any weight to it. Mr Bradley’s attributed view has not been the subject of any cross-examination. There is no direct reliable evidence as to the additional extent of the soft spot beyond the ‘Rosetta Stone’ area. The RJB (Rosetta Stone) area is 4,290 square metres. There is a substantial issue between the parties as to the entitlement of SCL for excavating this area. There is no satisfactory evidence as to the exact extent to which the soft spot extended into the Warehouse Chip Drier and Chip Grader areas. At paragraph 3.18.29 of his report Mr Wishart set out dimensions of zones of soft materials. At paragraph 3.18.35 he states that he was unable to verify those dimensions and goes on to state that he could not reconcile Mr Bradley’s account of these areas based upon his, Mr Bradley’s, recollection of the soft zones and site.

“I cannot reconcile this with the drawing – As Dug – Formation Level, Chip Grading/Dryer Hall that I had been provided with…”

He was not therefore able to verify the quantities indicated by the claimant.

Mr Simper’s view is that in any event the soft spot did not go below the foundation level that Skanska were obliged to go to. Skanska were therefore obliged to excavate to the depth necessary to remove the soft spots within the contract sum. I do not accept that view. They had to excavate below.

SCL’s original design of the warehouse floor slab was carried out in April 1997, accommodating the Egger requirements made at the first post tender meeting on the 14^th April, reflecting the intended use of heavier forklift trucks and higher stacking. The design was confirmed to Egger at the second post tender meeting on the 17^th April 1997. It accommodated the revised floor loadings and resulted in a three layer design comprising 300mm of reinforced concrete slab

The design of the slab was reconsidered and an amended specification confirmed to Egger on the 27^th May 1997. It was based on the premise that since glacial till would be encountered just above the formation level of 133.45 AOD the sub base could be placed upon the glacial till which was competent ground. The sub base was doubled to 300mm with a 225mm fibre reinforced slab above it.

The decision to amend the design and thereby lower the floor slab by 0.5m I am satisfied was primarily to resolve the methane problem. The revision was a “no cost” change and did not result in any change in the GMP. The new formation level was 133.475 that is 0.025 lower compared with the earlier drawing and the finished floor level was 134 AOD. What is significant is that the formation level of each design was virtually identical and the obligation upon SCL was to excavate to that level. They are therefore entitled to the difference between that level and the actual level they excavated to, to achieve competent ground.

I am satisfied from the evidence of Mr Bourke and Mr Howlett that the soft spot affected to some significant extent the Warehouse and the Chip Grading area. I judge this to be at least 40% of the area considered by Mr Wishart. The evidence as to the excavation undertaken by SCL and the provision of firm material used given by Mr Wishart is not seriously put in issue by Mr Simper, neither the rates of the work done. I accept Mr Wishart’s own evidence as to these matters and that the rate properly reflects that there would have been a compaction process in addition to the original priced within the GMP. The proven part of this claim I value upon the evidence at £41,000.00.

Egger put SCL to proof as to the extent to which roadways did not achieve a CBR at 3%, where it is proved that they did not, to proof of the cost of enabling 3% CBR to be achieved. Mr Howlett gave direct evidence that 3% CBR was certainly not achieved on the West road and the East road, and “in limited areas on the East road and a bit on the South road”.

Mr Tranter’s letter of the 4^th June 1997 written to Mr Dent of Egger highlighted the problem:

“We have instigated our own source of investigation regime onsite and enclose some of the CBR values gained to date along the line of the Western approach road which clearly identified the problem we are encountering. We are currently keeping records of all additional works required to overcome the problem areas. Details will be forwarded in due course.”

(emphasis added)

Heathfield Testing Services carried out a regime of testing, and some of their reports were enclosed in the letter referred to above. The extent of test areas on the east road is not vouchsafed nor the extent of the area to the “east of the south road”. There is a plan drawing entitled “temporary roads”, it seems that this is a mis-description in the sense that the road included on the drawing was a temporary road in the sense that it was for permanent use during the currency of phase one of the scheme. It was “temporary” only because it was not designed to last at least 25 years.

The further drawing GC TV 224/A was produced and Mr Howlett confirmed that it related to those roads which were permanent and failed to achieve CBR at 3%. Further test certificates relating to the east and central road have not been referred to since the tantalising mention of their possible existence in Mr Tranter’s letter. SCL sought to rely upon Mr Bradley to make good these deficiencies in this evidence. He confirmed that there were areas where CBR testing was not undertaken, namely, in the hard standing areas and lorry parks.

Given the unsatisfactory nature of the evidence, and the burden and degree of proof upon SCL I constrained to approach this claim with great caution. There are significant areas where CBR of 3% was not achieved and expensive work undertaken to bring it up to the proper requirement. I value this claim at £40,000. The absence of documentation cannot be blamed upon Egger: the crucial documents that might be in existence or copies of them, which no one bothered to procure, would have been in the custody of SCL or their sub-contractor.

This claim is primarily based on the evidence of Mr Wishart. It started off at £46,739 at the time of his main report, being reduced to £16,980 at the time of his second supplementary report. I am satisfied on the evidence of Mr Gardner as to the working method adopted by Barr in the Production Hall. They excavated deeper than the area necessary for the general slab because of the necessity to excavate and create machine bases with foundations at deeper levels. It was clearly more economic to excavate deeper to create the bases and then backfill. Mr Wishart’s evidence that there was a significant area as depicted in his sketch produced to the court, which was untouched by bases is clearly not accurate. It ignores the prepress. I reject his evidence in relation to this claim. I reject this claim.

SCL’s claim is in the sum of £106,118.

Egger put forward no positive case and Mr Simper valued this claim at nil on the basis that he was not satisfied in relation to the documentation and time sheets. Egger through him put SCL to proof as to the claim as they are entitled to.

As I have observed in a different context, Mr Simper tends to focus on the detail. I feel that on occasions he has failed to see the full picture.

“Q. Mr Simper. I do not wish to interrupt you but your evidence to the court is that it is a proper performance of your duty as an independent expert to value Claim H12 at nil, is it?

A. I have said that where I cannot make evaluation, then it is nil but I have accepted the figures as figures. There are elements of this section of work, this section of the claim, where the evidence shows that some of the repairs, the civil works, etc., etc., are – it is suggested that they are badly flawed because certain things were not done because certain pipes were not changed, and so on and so forth, and I cannot begin to come to a conclusion on that.

Judge Wilcox:

You are not in a position to gainsay the evidence of Mr Wishart, in other words?

A. Well, clearly not, your Lordship.

Judge Wilcox:

Alright.”

This claim is broken down into a number of component parts:

These costs relate to the invoice supplied by Bellvue Consultants for the preparation of a report on the cause of the hydrant main leaks. I am satisfied that this work was done. Indeed in the light of the evidence at trial, Egger now accept that this part of the claim should succeed. This part of the claim is made out therefore in the sum of £19,334.63.

This claim is valued at £29,538.95. The work was undertaken by N.G. Bailey directly employed personnel and a firm called Everards. N.G. Bailey have been paid £30,000 for this work by SCL who now seek to recover £29,358.95 from Egger. Egger assert that they are not liable to pay the full amount since certain of these works related to the installation of isolating valves which they say should have been installed originally by SCL within the GMP. There is a labour element involved. It is a PVC heat welding process, and the material element being the cost of the valve itself.

Mr Philipson, Egger’s works manager at the material time, said that good practice evidenced by the requirements of a British Standard required that some isolating valves should have been fitted at the outset, when installing the hydrant main. There is no evidence as to whether any valves were originally fitted and whether these valves were replacements because new pipe work was being installed, or whether they were additional save the evidence of Mr Harvey Mason who held a broad supervisory role as to these remedial works. He expressed the belief

“…they fitted a number of additional valves on instruction. I am not aware of any problems they encountered in so doing.”

He is unable to say what the original complement should have been. Egger complain that no original signed time sheets have been produced and Mr Philipson asserted that the labour element of N.G. Baileys charges appeared excessive. Mr Taylor I am satisfied compiled the request for payment from SCL and I am satisfied that he exercised care in the compilation of that document and in dealing with the data incorporated in it. Mr Taylor has given evidence to me as to various matters in this trial and I am satisfied that he is a reliable and conscientious witness. I accept that the leaks were only notified to SCL on 29^th June of 1999. Thus work done and charged for in the week ending 4^th June cannot relate to the repair of the leaks. In my judgment, on the evidence, the valuation of this aspect of the claim should be the reduced figure of £24,358.95.

Mr Philipson did not dispute that work to repair the Earth Farm was actually carried out. Mr Simper appears to accept that the bill has been paid to N.G. Bailey by SCL. No criticism is made of the quantum neither is any alternative valuation put forward. I hold that the work was done and the reasonable charge of £6,201 was made by SCL to N.G. Bailey. I value this part of the claim at £6,201.

Much of the work was performed by Lymburn, sub contractors employed by SCL. The claim is put at £42,622.61.

Mr Philipson seemed to have no first hand knowledge of the work but he proffered an opinion on an invoice. Mr Taylor of N.G. Bailey was not able to deal with questions as to Lymburn’s work. Mr Davies in submission submits that a percentage reduction should be made by the court as to this account. There is no evidential basis upon which the court could or should. It is an all or nothing claim. His submission is consistent with Egger’s acceptance that the substance of this claim is made out. Egger’s expert Mr Simper in his written evidence states that he has seen the daily labour return sheets submitted by Lymburn, which were variously signed by Mr Percy of N.G. Bailey and Mr Sandilands, the document co-ordinator of SCL. The three invoices total £41,097.86. There is a further reference in a document to Tarmac Remedials and remedials to a concrete slab.

I am satisfied on the basis of Mr Simper’s evidence that the work was done. This part of the claim is proved in the sum of £42,622.

This claim relates to the fees of Mr Harvey Mason, SCL’s claim consultant for supervising the repairs to the Hydrant main. I am satisfied that the specialists employed by SCL provided sufficient and adequate supervision. Mr Mason disclaimed any specialist experience. This part of the claim is not established. I reject it.

Fees of the specialist consultants £19,334.63

Pipe work repairs £24,538.95

Repairs to Earth Farm £6,201.00

Civil works to facilitate repairs £42,622.00

The contract provisions reflect that the employer’s additional requirements may involve the Contractor in the direct cost of performing the relevant work and in indirect and consequential costs. Clause 12(6) provides that:

“If compliance with any instruction affecting a Change increases or decreases the cost of management or design of the Works a fair and reasonable adjustment may be made to the Design and Management and Common User Fee…”(emphasis added)

Breaches or acts of prevention by the employer may give rise to an additional entitlement to compensation and an award of common law damages. There are a number of ways whereby the Court may be called upon to compensate SCL to the extent that they can prove that they have suffered loss and damage.

Mr Williamson submits that ‘the appropriate approach is one based on common sense and practicality. This is not a criminal trial or a 19^th Century Chancery Action: the court, taking into account its considerable and specialist experience should adopt a common sense and practical view of the question of whether the SCL have proved their loss. Perfect proof may on occasion be lacking, but that is no reason for the court not to do the best it can.’ (Emphasis supplied).

I accept that the court should adopt a sensible and pragmatic view. The context is the realities of the construction site, but mere common sense cannot supplant proof, which to be effective needs to be at least ‘adequate’.

The two quantum experts have considered these claims as if looking through different ends of a telescope. Mr Simper focuses through a narrow end and looks sometimes in vain for perfect proof and the demonstrations of every causal link. Mr Wishart looks at the broader picture and as to certain elements his focus is somewhat blurred. Mr Simper accepts that even if Egger succeed as to all the outstanding issues of liability and quantum, SCL would have carried out several million pounds of additional work representing a substantial increase in the original work scope of £10.6 million. To the extent that SCL are found to be successful that increase is the greater.

Where significant additional works have been proved, there is the almost inevitable consequence that some additional loss and expense is thereby caused. Some of the claims put forward by SCL are compendious claims. Egger characterised them as global claims and through their quantum expert Mr Simper called for every element to be causatively linked to loss or expense.

In many cases which concern pleading issues and applications to strike out insufficiently particularised allegations, courts have understandably been cautious in permitting global claims to proceed. But in some circumstances a global or total cost claim may be the only practical way to present a claim.

SCL was significantly delayed in performing this complex fast track project. The responsibility for a very substantial element of the delay was that of Egger. The maladministration of the contract had two results. Firstly that SCL were prevented from efficiently performing their obligations. Secondly, the task of identifying and tracing a myriad of individual and series of causal links was made extremely difficult and impractical in cases.

Whilst it is unattractive that the party who has created the difficulty should be its beneficiary, nonetheless the evidential burden upon the claimant to adequately prove its case should not be diluted. The logic of a global claim demands that all events which contribute to causing the global loss are events for which the defendant is liable. If causal events include events for which the defendant bears no liability, the effect of upholding a global claim is to impose on the defendant a liability in part not legally his. The global claim must therefore fail if any material contribution to the causation is made by factors for which the defendant bears no responsibility. The risks confronting the claimant pursuing a global claim and the proper approach to be adopted by a court in my judgment are analysed by Lord Macfadyen in John Doyle Construction v Laing Management (Scotland) (2002) BLR, p393 and at pages 407 and 408.

The defendants pleaded case advances a positive case only as to one aspect of the Barr sub-contract package only. I will consider that in more detail below. Mr Davies in his submission canvasses other non-culpable causal events. He also put these to various of the claimant’s witnesses. That pleaded case is in these terms:

“The claim also fails to take into account any additional costs which were incurred as a result of the Claimant’s and/or its sub-contractor’s own defaults. In particular the defendant will say that it fails to take into account additional costs incurred in managing problems that which were experienced on site in relation to Barr, the sub-contractor employed to carry out the Excavations and Foundations package. It is the Defendant’s case that delays by Barr and a lack of resourcing on their part caused delays to the project and resulted in additional staff costs being incurred by the Claimant. In support of this assertion the Defendant will rely upon the entirety of Barr’s conduct when on site and in particular the minutes of the meeting between the Claimant and Barr dated 8^th July 1997, paragraphs 4.2 and 4.3.”

Egger submits that this claim should be established on an actual costs basis. It accepts that an actual cost increase may be difficult to prove and doubts whether there has been any increased cost over and above that already claimed under other heads. In relation to some Common User Services, namely temporary hard standings and rubbish collection that is correct. The most substantial part of managing additional works is the staff element. The cost of this is claimed separately, see below.

The starting point of this claim must be the contract and particularly clause 12(6) where the cost of management is specifically dealt with:

“(6)

If compliance with any instruction affecting a Change increases or decreases the cost of management or design of Works a fair and reasonable adjustment may be made to the Design and Management and Common User Fee.”

No provision is made for a mechanical proportional increase to the Management fee as a result of compliance with instructed changes. Some changes of course may have neutral consequences in terms of management costs.

SCL submits that the appropriate starting point is the agreed Common User Services and Management Fee of £950,000, from which should be deducted any item which is claimed elsewhere or is unaffected by change in scope. Mr Wishart has made an assessment that the value of these residual items totals £188,000. He bases this upon the evidence of Mr Bradley whose evidence in this respect I accept as being accurate and reliable. He had the benefit of being on site throughout and was contemporaneously dealing with all of these matters. Mr Simper’s evidence was not impressive in relation to this claim. Because of pressure of time he had not appreciated that claim L1 also related to Common User nor appreciated that Mr Wishart had stripped out, fixed and duplicated costs in arriving at an adjusted sum until he was cross examined in the course of this trial. I am satisfied that Mr Wishart was conscientious in stripping out duplication and double recovery. The process of stripping out costs claimed elsewhere and fixed costs helps to ensure that only the items that are caused by the changed events relied upon, or the delay and disruption found remain. Mr Wishart’s evidence was tested in cross-examination and his answers below epitomise the soundness of his approach.

A. Yes, the reason I draw the distinction is because it is quite common for contractors to price common user services on a percentage, because it is the only way they can properly evaluate it, and that is why at paragraph 3.10.17, I have done precisely the same thing and I have drawn attention to it, I think, from memory, in my last sentence at the foot of page 21. I said:

“In my opinion the only sensible mechanism open to any contractor in this situation is to calculate the value of the fee payable proportionate to the value of additional work.”

Mr Simper was ultimately constrained to accept that the approach followed by Mr Wishart was a practical and sensible way of adjusting the fee and that it was not an economic task or sensible to suggest that the contractor should actually keep records of details like fuel and lighting to see how and to what extent such things were impacted by the changes.

Upon the evidence before me I value the appropriate percentage for the additional CUS and management costs is 2.32%.

SCL claim an additional £226,242 for the extra cost of additional on site staff and supervisory staff. The actual costs in the original contract period were £539,142. The tender allowance of £313,000 for which credit must be given, must be deducted leaving £226,242 as the net claim.

Clause 26 is relevant to this claim:

“26.

Expense caused by matters affecting regular process of the Works

The clause clearly envisages an actual cost basis to the evaluation of the claim. Both experts have sought to follow that approach.

The total period covered by this claim covers three sub-periods. The original contract period April of 1997 until mid-February of 1998, the 18-week extension granted by the court from mid-February to mid-June and thereafter.

Egger contend that the tender allowance was not adequate. They rely upon Mr Gardner’s evidence to demonstrate that late negotiation brought the total GMP downwards and that this (inter alia) eroded the allowance for staff costs. It is an ingenious argument but flawed. Egger were advised throughout the tender process and during the currency of the contract by Turner & Townsend their independent professional Quantity Surveyors. I am satisfied that Turner & Townsend rigorously examined the staffing proposals of SCL and compared them with other tenderers. They concluded that only Kvaerner, as they were then known and Balfour Beatty appeared to have put in fees at a realistic level and that

“in overall terms Kvaerner appeared to offer the strongest team followed by Balfour Beatty. Only Kvaerner and possibly Balfour Beatty appear to appreciate the need for a strong site based QS/commercial team to cope with the rigors of the second tender exercise”.

Mr Simper gave evidence of the alleged inadequacy of the tender allowance. He was basing his view upon Mr Gardner’s theory and analysis. Surprisingly he did not consider it appropriate or desirable to discuss this matter with Turner & Townsend to whom he had ready access. The final tender analysis figures were produced by Mr Slorick, the company secretary of Egger. This showed £313,000 as a tender allowance for staff costs and I am satisfied that it was based on the staffing proposals contained in the ‘organogram’ which depicted the proposed number and allocation of staff, as did Turner & Townsend’s own critical analysis of the staffing requirements and supervisory needs. Within several weeks of the commencement of the contract, additional personnel were employed by SCL. In particular, the Works Manager post was split into two, Mr Howlett being responsible for Civils and Mr Webster for Building with a general foreman each. A further planner, Mr Simpson was taken on in May of 1997 in addition to Mr McKeane. Mr Sandilands, a document controller in the original proposal to be employed for 21 weeks only was employed throughout. Mr Simper concluded that the cost of nine additional staff over and above those foreshadowed in the organogram should not be allowed:

“I was of the opinion that many if not all of the nine staff members listed above were really anticipated by Skanska in any event and their cost was a lost leader in order to obtain the project, even though you have not taken me to those figures it seems to me they would have had to have brought these sort of people on site to run the project”.

It is a matter of regret that Mr Simper did not see fit to interview Turner & Townsend or analyse the tender allowance himself. It is expected of an independent expert that he investigates matters himself and with intellectual independence and objectivity conduct his own analysis. Mr Simper chose to accept Mr Gardner’s theory which ignored the amount and adequacy of the tender allowance based on the approved number and deployment of personnel shown in the organogram who were employed and paid for in addition to the significant number of extra staff who were also subsequently employed.

The court must determine whether as Mr Simper characterised it, Kvaerner were “trying it on”. Did Turner & Townsend “have the wool pulled over their eyes”, or as SCL submit, there was another and obvious explanation. It is well to remind oneself of the ambitious nature of this project. It was a fast track project of great complexity. It was administered in a way that caused significant delay and disruption and there were many significant changes.

The object and intent of the contractual scheme as recognised by Turner & Townsend and SCL was that the works manager and his foreman would effectively supervise the sub-contractors and make sure that they had the information available to do the work. As Mr Bradley observed ‘the original design concept was not rocket science, it was a basic construction activity’. SCL at the outset had sufficient managerial and supervisory capacity to undertake its task under the contract. The incompetence of Egger’s contract administration and the lack of resource devoted to administration by Egger made it inevitable that demands upon SCL’s management resources would become greater and the management role greatly expand.

The changes to the site layout summarised in the A.J.S.P letter and enclosures of 15^th April of 1997 and the drawings that accompanied it in my judgment led to a significant change of emphasis, compared with the tender proposals and rendered much of the crucial early preparatory work of lesser value. This was not the kind of project where long lead-in times were practical. In the early stages of such a contract, it was vital to establish the basics such as the layout, affecting as it does, site preparation measures, and the incorporation of complex plant and design and other priorities. I accept the evidence of Mr Bradley and Mr Grodzicki as to the extent of the impact of these significant changes which arose out of the revised layout. It is evident that in order to keep the momentum and in order to achieve ‘first board’ when planned, that the advised additional staffing was made necessary. I am satisfied that because of the piecemeal release of information by Egger, analysed in the liability judgment, and their failure to properly co-ordinate the activity of their process plant contractors, it was necessary for SCL to appoint an additional planner in order to achieve that co-ordination.

I am satisfied on the evidence before me that the personnel particularised in the schedule at T1 page 38 were employed for the period shown and that the cost of their employment was as shown in Schedule T1 38. Egger and Turner & Townsend were furnished with information as to the employment and deployment of personnel during the currency of the contract on the express basis that agreement was required for the additional resources. I reject Mr Simper’s facile explanation that the tender allowance and the staff proposals were inadequate and that the proposals were a loss leader. There is no evidence before me that there was any waste of resource or mis-use of personnel. The whole object of the GMP contract was to sub-let the works in separate work packages and to utilise the management engineering and construction expertise of the sub-contractor. As Mr Wishart observed, contractors are managers. The days when contractors employed huge labour forces are long since gone. SCL were given the right to carry out nine works packages themselves. Egger submitted this must have increased the managerial burden on SCL themselves. The reasoning behind that assertion is flawed because there is no evidence in relation to these works packages, that the organisation and disposition of these separate sub-contracts were in any way different to those of the others. No cross-examination was directed to this matter. Egger further submits there were problems of SCL’s own making as for example time spent dealing with soft spots, time spent on the effluent treatment problem and the log park drainage problem and on Barr’s sequencing and resource difficulties. Mr Davies submits that ‘..it is hugely improbable that any project of this size and complexity could run without some ‘self inflicted wounds’ from the Contractor’. Experienced QS Professionals like Turner & Townsend clearly would have appreciated when assessing the adequacy of staff deployment and the financial allowance appropriate for a project like this, that the staffing resource must contain some built-in reserve for such eventualities. That is after all what management is all about. I am satisfied that there was no material contribution to the necessity of employing additional staff other than that which was the responsibility of Egger. The only causally significant factors responsible for the additional staffing costs were those for which Egger was liable.

This is a part of the prolongation loss and expense claim at L7. Egger submit that an extension of time is not necessarily co-extensive with a prolongation and indeed in a project of this size and complexity would be very unlikely to be coextensive. The submission is not controversial. The additional staff claim stands at £76,349. This assessment includes the cost of Mr Tranter, the senior project manager.

Egger argue that SCL had not proved that he was employed in this project after February of 1998. There is an apparent discrepancy between his evidence given at the liability trial and that given in this quantum trial. In October on Day 5, page 85 of the transcript, he said:

He was shown a document claiming the cost of his full involvement from February through to August 1998 with spasmodic involvement during September and October and he confirmed that the picture there was broadly accurate. He was then shown the transcript of Day 4 of the liability trial at page 96:

He asserted that both versions he had given were true, the former making a distinction that his managerial role tailed off in the latter period; the latter reflecting that he had adopted a backroom or logistics role, putting information together. He emphasised, and I accept, because it was confirmed by Mr Johnson of Turner & Townsend that he had attended at Hexham with Turner & Townsend trying to resolve major issues at lengthy meetings. The evidence given by Mr Tranter was that later he was available to assist in the resolution of many issues. It perhaps exemplifies the difficulty a witness can find himself in where liability and quantum are separately dealt with and he has evidence to offer at both trials. I am satisfied that there is no question of his seeking to mislead the court. Mr Tranter is patently honest. In my judgment in the post-February 1998 period, Mr Tranter was primarily engaged in the logistic exercise of preparing a claim. I am not in a position whereby I can apportion what, if any, time Egger might be responsible for, save that it would be very minimal.

SCL have not proved that Mr Tranter was a necessary part of the additional staffing during this period. His on-site replacement Mr Lockheart was part of the team during this period. A sum of £28,160 represents Mr Tranter’s involvement during the whole of the post-February period for the period mid-February to mid-December. The proportionate costs attributed to his services for this period must be deducted from the claim of £76,349. The balance of this sum relating to the third period mid-June until December of 1998 properly cannot form part of any valid claim in relation to that period.

There is no cogent evidence before me that would show that save for Mr Tranter, the staff employed were not there in consequences of Egger’s breaches or culpable delay and disruption. I accept the evidence of Mr Wishart as to the cost of the additional staffing, namely £185,326 subject to the deduction for the costs of Mr Tranter’s services falling within these periods.SCL are entitled to recover £185,326.00 less the cost attributable to the employment of Mr. Tranter(£19026) £166,300.00.

These are claimed by SCL on the basis of Mr Wishart’s assessment of £76,349. This claim for additional staff costs was added by way of further amendment after the liability trial. It is submitted by Egger that there was no liability issue before the court as to an entitlement to additional staff costs after the date of extended practical completion decided by the court.

Mr Wishart in his first report confirmed what would be considered the position as to delay costs as opposed to practical completion.

“…In my opinion when considering delay costs, the date of practical completion forms a watershed in contractor’s costs. Costs incurred in the delay period up to the date of practical completion are normally considered for recovery. After the date of practical completion, my normal assumption is that the costs incurred were costs which would have been incurred in any event, the only difference is that they were incurred at a later date.”

The contract contemplates a certain amount of commercial activity taking place up to three months after practical completion, by way of example, see clause 11.8 of Schedule E of the Employer’s Requirements. There would also be activities such as snagging. SCL’s case is that they continued on site because of Egger’s breaches culpable delay and disruption from June 1998 to December 1998 and that there was no other material contributory cause. There clearly was, snagging and commercial activity being two reasons. SCL submitted that once the work was essentially completed in a physical sense, they ought to have had a relatively straightforward time in snagging the works and agreeing the Final Account with Egger. In the event matters did not go at all straightforwardly, on the contrary, Egger’s failure to properly administer the contract continued and intensified. The post practical completion conduct complained of is not part of SCL’s pleaded case. There is no cogent direct evidence supporting their assertions. In fact there is cogent evidence that there were other material contributory causes for SCL being on site for which Egger were not responsible. There is no reliable evidence that Egger’s pre-practical completion breaches warranting the grants of extensions of time by the court continued and caused further loss. I reject SCL’s claim for additional staff costs between June of 1998 and December of 1998.

This composite claim relates to additional staff costs between February of 1998 and June of 1998 and staff costs between June of 1998 and December of 1998, which are dealt with above. There are also what are described as the running costs for these two periods. It follows from the reasons given above in relation to staffing costs for the period June of 1998 until December of 1998 that the same reasoning applies to the claimed running costs. I reject therefore that part of the claim. As to the period January of 1998 to June of 1998, many items the subject of this claim have been agreed.

This is the cost of temporary accommodation including rental and damage. Mr Simper discounts damage, Wishart says that sadly it is inevitable if the cabins are on site for longer. I accept there is a greater risk of damage. I prefer Mr Wishart’s assessment in the sum of £15,464.00 for this part of the claim.

It is claimed in a sum of £7,127. Mr Simper has reduced it to £5,779. No good reason for the deduction has been adduced and no SCL witness was cross-examined on this topic. In my judgment the claim is made out in the sum of £7,127.

This is claimed in the sum of £2,552. Mr Simper says the claim is valued at nil because SCL have not demonstrated that the retained scaffolding was attributable to a distinct item of work. Mr Wishart states that if works are prolonged, some scaffolding will inevitably be needed for longer. I accept his common sense view. This claim is made out in the sum of £2,552.

This is claimed in the sum of £1,022. Mr Simper observed that no allowance was made in the original tender. That may be so. I am satisfied that these were needed and additional during this period and the cost of them was £681.00.

Mr Simper found no invoices supporting this claim. Mr Wishart was able to satisfy himself through the internal ‘Conax’ system that the fuel was purchased and used. I accept his evidence. This claim is proved in the sum of £3,975.

This is claimed in the sum of £16,949. Mr Simper proffers a figure of £14,552, reduced because of inclusion of charges for transport and electronics. Mr Wishart allows the full amount because these are part and parcel of the cost of providing the full service. I accept his reasoning. I accept his assessment. The claim is made out in the sum of £16,949.

This claim is in the sum of £7,630. Mr Simper disallows the claim on the basis that SCL own the computers but clearly on the evidence that there was an internal charge which is just the same as if the computers had been hired in. I am satisfied that the actual costs in the period of delay are part of the delay costs properly claimed. This claim is proved in the sum of £7,630.

This is claimed in the sum of £2,535. Full details of these expenditures were recorded upon the Conax System. Mr Simper did not check this reliable record. This claim is made out to the extent of £1418.00.

The total of these sums originally claimed covered a period of mid-February to mid-December. That is a period of ten months. In my judgment the recovery should be only for the period mid-February – mid-June, four months being four tenths of the expenditure.The figures reflect that apportionment.

SCL’s claim is assessed at £439,298.53 by Mr Wishart. He applied a profit/overhead mark-up of 7.05% derived from Mr Bradley’s evidence. Mr Simper values this claim at nil.

The rationale of SCL’s claim is explained by Mr Bradley who says that the overhead due to the increase in the value of works refers to the costs incurred by the Company in providing local support via the regional offices and Head Office support for many of the services that are required to operate the business.

“The regional office provides local direct contact, marketing, secretarial support, accounting support, buying department, safety officers, quality assurance, auditors and the like. Head Office provides the human resources facilities, IT support, accounts, engineering departments, estimating, group marketing and group purchasing….it is a commonly accepted principle (sic) in the industry where overheads and profits are added to the value of work undertaken. In my experience most commercial advisers accept that a percentage addition is made to all variation to compensate for additional overheads and profits that would have to be expended/not recovered because the work of that project is not going to plan. This only applies where the employers is at fault. The overheads are normally agreed between the respective parties and in my experience are normally between 7.5% and 12.5%. Inevitably, it is the contractor who seeks the higher percentage and the employer who seeks the lower, but agreement is nearly always achieved”.

For February of 1997 SCL produced Group Company figures showing that the net operating expenses set against turnover gave a percentage overhead figure of 6.36% . A profit figure of 2.39% was arrived at by dividing the figure for profit on ordinary activities before taxation by the turnover figure. For the whole 12-month period the total percentage of overhead and profit was assessed at 8.75%.

For 1998 the respective figures for overhead and profit are 4.19% and 0.61%. This gives a total of 4.8% for the 12-month period covered. Having arrived at these figures, Mr Bradley refined the total percentage figures arriving at weighted averages. He argued that since during 1997 the project ran for 8 months, the percentage must be eight-twelfths i.e. 5.83%. For 1998 when the project ran for six months, the percentage must be six twelfths, i.e. 2.4%. He then added the two percentages together giving a sum of 8.23% which he then divided by the 14 months the contract covered, giving 8.23 over fourteen = 0.5878% x 12 = 7.05% per annum.

Having averaged the two years, the monthly percentage would have been 0.5664% giving for the 14 months of the project the higher percentage figure of 7.904%. There are difficulties with this avowedly commercial approach. The overhead element for the project could be very much less or very much more than the company or group overhead. The figures for 1997 and 1998 shows a significant swing reflecting factors which may have nothing to do with the viability of this project. It cannot apply to all heads of claim under contract.

The claim advanced by SCL rests on three bases, namely under Clause 12, Clause 26 and as common law damages. For ease of reference I set out the relevant contractual provisions

If:-

Nowhere in the contract is profit referred to. The claim is not made out as a loss of profit claim as such.

Changes within Clause 12 may result in a fair and a reasonable adjustment to the Design and Management and Common User Fee. Ultimately this could affect the profitability of the project.

Matters affecting regular process of the Works resulting in material disruption or prolongation giving rise to expense, not otherwise provided for or reasonably contemplated are subject to Clause 26(2). Breaches not falling within Clauses 12 or 26 such as the late provision of information, failure of administration of the contract such as previously and in proper sequence providing information which give rise to disruption and prolongation may give rise to common law damages. This clearly would include compensation for loss and expense. The court would be prepared to draw the inference that the opportunity to use personnel and resource elsewhere for profit would have been lost. Mr Simper in his report recognised that there is the profit that a contractor can normally recover as an addition to the net costs of works which is either varied and results in a higher cost or simply extra instructed works not within the scope of the contract works. This would relate to claims under Clause 12. Secondly, there is the category of profit which may be lost as a result of delay or disruption. The delay and disruption may give rise to a Clause 26 claim. Since profit is usually that which is left after deducting all costs from payments received, the enhancement of the level of the GMP to the extent to which entitlement to expense is shown may affect the claimant’s profit position.

The residual claims for common law damages as they are compensatory may properly include a loss of profit element. I am satisfied that the defendants are responsible for the materially causative events and matters giving rise variously, to an adjustment to the Design Management and Common User Fee and to expense, and to compensatory damages at common law. But because the financial outcomes vary as to the mechanism for relief advanced, it is incumbent upon the claimant to demonstrate if possible, which of the matters relied upon give rise to relief under clauses 12 or 26 or at common law.

Clause 12(5)(c) provides that the cost of site administration shall be included in the valuation of additional or substituted work caused by any change and clause 12(6) provides that if compliance with any instruction affecting a change increases or decreases the cost of management, a fair and reasonable adjustment may be made to the Design and Management and Common User Fee. Such costs in my judgment include the on costs provided for under the contract. The tender allowance for these was £300,000 which equates to two and a half per cent of the total net cost. Similarly, the continued liability to the on costs including head office and regional support and the continuing costs of managing the labour force constitute a necessary expense under Clause 26. These charges customarily are applied as a proportionate percentage. Matters arising under Clause 12 and 26 I am satisfied properly give rise to a two and a half per cent charge.

Where there is a claim at common law and not within the contract, true loss of profit may be recoverable. It would have to be shown that the resources of SCL would have been employed elsewhere gainfully acquiring profit. There is no formal proof of this. The group profit element achievable in 1997 according to Mr Bradley was 4.19% and for 1998 0.61% but it can be seen that in relation to the common law claim, the loss of profit element is both slight and remote.

The proper approach in my judgment is to use a figure of 2.5% of total net additional costs in relation to the claims under Clauses 12, and 26.

Insurance was procured by Skanska Construction’s Group office and a charge was made by group for this project. It was the practice that the Skanska Construction Group purchased insurance for the whole group rather than on a divisional regional or project basis. A number of policies were obtained including employers liability, public liability and professional indemnity. Scale purchases may result in economies. Different projects or ventures on the other hand have different risks. SCL Group paid its premium at the beginning of the year and recouped this through the various projects by adding a percentage for the contract costs each month based on the previous months turnover. In 1997 the applicable percentage levied on turnover in respect of insurance charges was 1.12%. As turnover increased, so would the amount payable for insurance charges by the group. The merit of this system is that inter group there is ease of the administration and the inter group risks may be shared. But this approach does not form an actual cost basis for the project, and it is difficult to see how these costs reflect the risks of this project and site.

The GMP agreed figure for insurance was £84,000. Properly adjusting the element of the Management Design and Common User fee for insurance the percentage of the cost of the works is 0.79%. Thus the 0.79% applies to the gross amount less the adjustment for the management design and common user fee element .That amount is inclusive of the sub-contractor’s claims and the N.G.Bailey acceleration claim. In my judgment that is the percentage that should be added to the cost of the additional works to represent the cost of additional insurance.

Practical Completion was determined to be the 15^th June 1998 in the Liability judgment.

Given that the sums claimed relate to work done and valuations submitted up to six years ago, the sums in issue are substantial.

SCL claim interest/finance charges under three heads:

The claim under Clause 26 is as part of the expense in performing the Contract which otherwise would not have been incurred as a result of the regular progress of the Work being materially disrupted or prolonged. Clause 26 provides that the Guaranteed Maximum Price shall be increased by the amount of that expense subject to Clause 26(2), Clause 26(2) provides:

The object of Clause 26 is to reimburse the Contractor for the true cost to him of the prolongation and disruption in consequence of the state of affairs or events caused by the Employer. The provisions of Clause 26(2) enable the Employer timeously should he choose, to investigate and ascertain for himself the extent of the loss and expense in consequence.

The payment provisions of the Contract are relevant to a proper consideration of Egger’s payment obligations and to a consideration as to the extent of their compliance. So far as interim payments are concerned, the provisions are set out at Clause 30(3) as follows

“(c)

If on receipt of the Contractor’s interim valuation the Employer considers that the amount stated as due in the interim valuation is not in accordance with this Contract he shall within 14 days of the interim valuation issue to the Contractor a notice with reasons to that effect stating the amount (if any) he considers to be properly due as an Interim Payment.

(d)

Not less than 14 days after the issue of his interim valuation the Contractor shall issue to the Employer in respect of his Application for Interim Payment an invoice in the amount of the Contractor’s interim valuation or, where the Employer has issued a notice under Clause 30(3(c) the amount stated in the said notice as the amount (if any) the Employer considers to be properly due as an Interim Payment.”

The scheme therefore provides that on day 1 an Interim valuation is issued. Day 15 becomes the last date for the service of a counter notice by the Employer, and is the date upon which the Contractor should issue an invoice in the amounts supplied for unless a counter notice is served. On day 36 it is the obligation of the Employer to pay the amounts invoiced. The Employer is not entitled to ignore the applications for the amounts applied for, or to pay some amount without giving proper notice. It is essential to the proper functioning of the timetable that the employer either serves a counter notice or pays the amount applied for.

Findings have already been made in the Liability judgment as to the systematic failure of Egger to conscientiously and timeously administer the contract, particularly in relation to Interim Valuations and the due considerations of applications for extensions of time. By way of example, Mr Graham Johnson of Turner and Townsend candidly accepted that there was no investigation of the claim involving the alleged need for increased staffing levels, although evidence was put to them contemporaneously for both theirs and Egger’s consideration. He also accepted that Turner and Townsend and Egger failed to give any detailed consideration to the loss and the expense claim. In relation to the £125,000 interim payment reflecting the Barr loss and expense for the costs of acceleration Egger initially included that in an interim payment. They later deducted it without giving any explanation for such deduction.

No prolongation costs were paid by Egger, because Egger through Mr Dent either wrongfully failed to grant extensions of time or neglected to consider extensions of time. As to the counter notice requirements of Clause 30(3)(c) it is evident to me that Egger made no proper attempt to comply with these requirements. It is not a question of there being some slight slippage in time, or failure to comply with exact form. There was a gross failure to comply with the spirit and intent of these provisions in any practical and pragmatic way.

Egger were clearly alive to the interest and financing consequences for Skanska. In relation to valuation No.9. there was a meeting on the 28^th January 1997 between Egger and Turner & Townsend when Mr Johnson expressed concern that under-payment could lead to claims by Kvaerner for finance charges, and have an effect upon the progress of works sub-contractor performance.

Mr Williamson QC submits that the wording of Clause 26 allows SCL to claim interest and/or finance charges under the Contract. He relies upon FG Minter –v Welsh Capital ATSO (1980) 13 BLR page 1 where the Court of Appeal considered Clauses 11(6) and 24(1) which gave rise to a loss and expense entitlement for variation and disruption respectively, in the 1963 RIBA Standard Form Building Contract Local Authorities Edition with Quantities. It was held that ‘loss and expense’ included any finance charges and interest upon other primary loss and expense. Mr Davies QC submitted that there was nothing in the GMP Contract which was comparable to the provisions in Minter. I do not accept that submission. Clauses 26 and 30 in the GMP encompass an entitlement to interest and finance charges on primary loss and expense and a mechanism whereby the appropriate amounts can be ascertained and paid. An entitlement to finance charges and/or interest on established primary loss and expense may include compound interest. See Rees and Kirby –v- Swansea City Council [1985] 30 BR 1 where Robert Goff LJ at page 23 says:

“There remains to be considered the question whether the Respondents are entitled to recover their financing charges only on the basis of simple interest, or whether they are entitled to assess their claim on the basis of compound interest, calculated at quarterly rests, as they have done. Now here, it seems to me, we must adopt a realistic approach. We must bear in mind, moreover, that what we are hear considering is debt due under a contract; this is not a claim to interest as such, as for example a claim to interest under the Law Reform Act, but a claim in respect of loss or expense in which a contractor has been involved by reason of certain specific events. The Respondent, like (I imagine) most building contractors, operated over the relevant period on the basis of a substantial overdraft at their bank, and they claim in respect of financing charges consists of a claim in respect of interest paid by them to the bank on the relevant amount during that period. It is notorious that banks do not themselves, when calculating interest on overdrafts, operate on the basis of periodic rest; on the basis of the principle stated by the Court of Appeal in Minter’s case, which we here have to apply, I for my part can see no reason why that fact should not be taken into account when calculating the Respondent’s claim for loss or expense in the present case …”

The second basis upon which SCL put their claim is in damages, and in order to do so to claim any interest and finance charges they have to bring themselves within the second part of the rule in Hadley –v- Baxendale (1854) 9 EX 341 at page 145. The onus upon SCL is to demonstrate Egger had knowledge of the facts or circumstances of financial arrangements whereby SCL loss was a likely consequence of their default.

As far as the final account position is concerned the relevant clauses of the contract are 30(5) and 30(6) which provide:-

“(5)

(a)

Within 3 months of the issue by the Employer of a Statement of Practical Completion for the whole of the Works, the Contractor shall submit the Final Account and the Final Statement referred to in Clause 30(5)(d) allocated to the Sections, for agreement by the Employer and the Contractor shall apply the Employer with such supporting documents as the Employer may reasonably require.

(b)

The Guaranteed Maximum Price shall be adjusted in accordance with the Conditions and the Final Account shall set out the full final account for each Sub-Contractor together with the adjustments to the Guaranteed Maximum Price set out in Clause 30(5)(c) to calculate the Finally Guaranteed Maximum Price.

(6)

Subject to any deductions authorised by the Conditions any balance properly stated in the Final Statement in accordance with Clause 30(5)(d) shall, as from the 14^th day after the Final Account is agreed or by the operation of Clause 30(5)(e) become conclusive as to the balance due between the parties, be a debt payable as the case may be by the Employer to the Contractor or by the Contractor to the Employer”.

The timetable was a precise one, practical completion being the 15^th June 1998, the submission of the final account should have been by the 15^th September 1998 and the final account should be agreed within a sensibly short time, and by 30^th November 1998.

The scheme of the contract of course was to ensure that the final account should operate only as a tidying up process since if the interim payment mechanism was properly adhered to, the greater part of any sums due would have been paid during the currency of the contract.

In relation to the interim valuation provisions above I have summarised the principal and operative causes for the breakdown of the payment provisions dealt with extensively in the liability judgment. They also apply in relation to the failure to agree a final account. However, by late 1998 it was evident there was going to be a substantial counterclaim arising out of the failure of the warehouse floor slab, and by November 25^th 1998 from a starting point of a GMP of £12m SCL’s claim had more than doubled, being put at £27,690,000.00.

There is no evidence before the court that SCL in consequence of incurring primary loss and expense, were incurring financing charges/interest payments to third parties.

I am satisfied that SCL during the currency of the contract period and thereafter received interest on sums in its account at the rate of 1% over Bank of England base rate. The interest was compounded every three months. I am satisfied that had they not suffered primary loss and expense those monies would have been placed on account and would have earned interest at 1% over Bank of England base rate compounded every three months. Whilst they did not pay out to a third party finance charges, by funding the loss and expense themselves they did indirectly incur finance expense. By September 1997 SCL had expressly notified Egger that they were incurring loss and expense and by necessary implication that there was a financial loss incurred in the absence of timely payment, as indeed was recognised by Mr Johnson of Turner & Townsend and highlighted by him at the meeting in January.

In respect of interim applications, monies underpaid likewise would have been put on account earning interest. These sums were identified by Mr Bradley in his unchallenged evidence which I accept as accurate and reliable.

In relation to the monies due under the final account as from the 30^th November 1998 it seems to me that similar provision would have been made.

Prima facie therefore SCL have demonstrated an entitlement

However there is a substantial counter-claim, and significant works were not properly executed. Egger have suffered inconvenience and loss of amenity and considerable time. The warehouse slab is a case in point, and the flooded ducting system is a further example. An award of an investment rate of interest on all valuations as they became due in respect of all works, irrespective of their presently adjudged utility performance and value would be to confer undeserved benefit upon SCL and result in unfairness to Egger.

In respect of categories a) and c) the rate will be at 1% over base rate not compounded. In respect of b) the rate will be 1% compounded quarterly from 30^th September 1998.The 1% Compound interest will run from the 30^th September1998.The Quarter days are those of the Banking Industry. In respect of c) the following considerations apply. The interest on the Claim and Counterclaim must be calculated independently. The interest is to be paid on the difference between the final account and the amount in fact paid to SCL, and not the difference between the final account and Turner and Townsend’s gross valuation.

In relation to Egger’s own interest claim they have advanced no positive case or evidence as to their interest position. Under the Counterclaim the losses are sustained when the payment is made, not from the date of the rendered invoice. Interest is claimed under s35A Supreme Court Act 1981 where simple interest is provided for. In a commercial transaction such as this1% over the base rate is appropriate. The court is entitled to look at the context in which the transaction takes place including the relative positions of the parties to the contract and its performance.

I indicated willingness to hear further submissions as to this aspect of the case. None have been received.

SCL seek to pass on to Egger sums in respect of loss and expense paid or payable to its sub-contractors.

Egger’s pleaded case is that no sum is due in respect of these claims. The court has already received a great deal of evidence relating to Process Entry and Practical Completion in every zone of the project. There was a detailed consideration of the dominant/critical delay and SCL were granted full extensions of time as claimed. Egger were held responsible for the consequences of late and changing information served piecemeal. The contract works were wholly performed by sub-contractors as the contract scheme provided. The conclusion therefore is compelling that disruption and delay was suffered by the sub contractors. In that context the court must consider the claims made by the sub-contractors and settled.

The law encourages commercial settlements, both as a matter of policy and common sense. There is a helpful and accurate statement of principle in the 7^th edition of Keating on Building Contracts. Paragraph 8.42

“Sums paid in settlement of third party claims where a defendant’s breach of contract renders the claimant liable to a third party, the claimant can normally recover the amount of that liability as damages for the breach, provided it is not too remote. If the claimant reasonably compromises the third party liability, the amount paid under the compromise is admissible prima facie of the loss caused by the defendants breach, although further evidence may be adduced to determine the actual loss. The claimant must prove the settlement as reasonable but does not have to prove strictly the claim made against him in all its particulars. It will also usually be necessary to establish the claimant’s liability to the third party and the defendant’s liability to the claimant, since evidence of compromise is relevant only to the measure of damages.”

The parties must have been taken to have contemplated that in circumstances where the works were disrupted or prolonged, SCL would reach settlements with its sub-contractors on a broad commercial basis. It would not have been contemplated by either Egger or SCL that there would be an investigation as between SCL and its sub-contractors of the kind that might be carried out by a judge or arbitrator, particularly in the context of this maladministered contract.

Egger contends that sums paid to a relevant sub-contractor may have included monies which were attributable to the inefficiency of that sub-contractor or another, and thus should not be the liability of Egger. Complaint is also made that insufficient particularisation was obtained from the sub-contractor before entering into the settlements. This criticism is rendered the less attractive because it is evident that SCL entered into commercial settlements when Egger and its professional quantity surveyor advisers, Turner & Townsend, knowing of the difficulties that the sub-contractors were exposed to, by reason of Egger’s default, chose not to be involved in the settlement process. I am satisfied that Mr Bradley kept Mr Dent fully in the picture as to the sub-contractors claims and as Mr Johnson of Turner & Townsend confirmed, they were also kept apprised.

In relation to the Barr settlement claim, and the N.G. Bailey’s claim which is still awaiting resolution, any consideration of these claims includes an assessment as to the extent to which they were entitled to any extension of time. Egger’s pleaded case in relation to Barrs is that any delay was caused by Barr’s own inefficiency and that there was a knock-on effect.

Mr Simpson, a planning consultant originally employed by and later retained by SCL as a Consultant gave evidence at the Liability trial. He gave evidence in this trial as to the extensions of time that the claiming sub-contractors were entitled to as against SCL in consequence of Egger’s breaches. He had the advantage in that his major role during the currency of the Contract was to endeavour to co-ordinate the activities of the process contractors on site. In filling the administrative vacuum left by Egger, he had direct hands on knowledge of the inter relation of the process contractors employed by Egger, the sub-contractors and of SCL. He impressed me as someone who was objective, meticulous as to detail, and not hide bound by theory as when demonstrable fact collided with computer programme logic.

His analysis was accessibly depicted in a series of charts accompanying his evidence. Egger was given leave to adduce expert programming evidence from Mr Keith Pickavance in relation to this evidence within the following limits:-

“To analyse and respond to the evidence of Mr James Simpson as regards:

(i)

The methodology of analysis employed by him in reaching and offering conclusions on:

a)

The extensions of time to which the principal Sub-contractors (Barr, Bailey & KCBL) are entitled to against SCL;

b)

The reasons why those entitlements arise from matters for which Egger are responsible; and

(ii)

The lengths of those extensions of time”

Mr Pickavance produced a report of some hundreds of pages supported by 240 charts. It was a work of great industry incorporating the efforts of a team of assistants in his practice. It profits from Mr Pickavance’s input based on his practical experience. Of recent years 75% of his energies have been devoted to the forensic field as a professional expert or arbitrator and 25% to his delay consultancy practice. It was evident that the report, which did not cover all aspects of Mr Simpson’s evidence, was largely based upon factual matters digested for Mr Pickavance by his assistants and in part relying upon data provided by Mr Dent who administered the contract with Mr Gardner for Egger and Mr Harry Philipson who was works manager for Egger. Neither Mr Philipson or Mr Dent gave evidence as to these matters. Both were available to do so. Both were working upon the Egger case defending the claimant’s claim and on the counterclaim made by Egger. There were times when the impression was created that Mr Pickavance was not entirely familiar with the details of the report, which he signed and presented. At one time he told me that Mr Dent and Mr Philipson were only consulted upon details of logic linking. He later had to concede because it was written in his own report that their role was also as to primary factual matters resolving factual inconsistencies that presented themselves. There were pressures of time upon him. This and the extent of reliance upon the untested judgment of others in selecting and characterising the data for input into the computer programme however impeccable the logic of that programme, adversely affects the authority of the opinion based upon such an exercise. The delay issue relating to the Liebherr crane base in Zone E epitomises the unreliability of Mr Pickavance’s evidence based upon his inadequate research and checking, even when he was put on notice.

He was asked about this delay:

Q. At 10.5.7 what you have written is this:

“The crane base was ready to accept the cast in by 2^nd December of 1997. However, remedial were required to the crane base reinforcement. These remedial were complete by 20^th January 1`998 when Barr comment that they were awaiting a price from a scaffolding contractor for these works. On 27^th January of 1998 the shuttering works had thus started. On 3^rd February 1998 the shuttering was still continuing. The above sequence would indicate that any delay to the completion of the crane foundation was as a result of Barr’s remedial works, which then had a knock on effect which required a specialist scaffolding sub-contractor prior to completing the shuttering”.

Q. Look at what he says at paragraph 191:

“The shuttering work to which the PCL report refers has nothing to do with reinforcement remedials.”

Q. Paragraph 48, the second bullet:

“I consider that event E8, ‘the Liebherr crane foundation had no effect upon the completion of Barr’s work as in zone E’ is misinterpreted in PCL’s investigation; ’10.5.12 no delay to completion of Barr’s work in the zone’. It is clear from the facts that Barr operations were extended through until mid-February 1998 as a result of the late supply of built-in components by Egger.”

The accuracy of Mr Simpson’s factual evidence was clearly corroborated by the programme reports dated Monday 9^th February 1997 recording progress for Zone E at (v) “Crane shaft formwork continues: Egger lift base ring onto shuttering for casting in situ 8^th February”.

It was clearly vital that for Zone B to achieve its completion date of 22^nd September that the mounting ring of the giant Liebherr crane had to be on site to be cast into position by the end of August. Mr Pickavance and his team should have enquired into the availability of this critical Egger component at the outset. He was put on express notice by Simpson’s fourth witness statement as to the questionable factual basis of his unqualified opinion that Barr were responsible for the delay. It is surprising that there was not sufficient intellectual rigor to admit of the possibility of doubt in the light of Mr Simpson’s fourth statement.

It is evident that the reliability of Mr Pickavance’s sophisticated impact analysis is only as good as the data put in. The court cannot have confidence as to the completeness and quality of the input into this complex and rushed computer project. The impact analysis was primarily concerned with the critical path analysis of delays and for its intended logic to work it needed a network, thus the contract programme originally in bar chart form, graphically expressed using Power project format had to be reconstructed in network form, together with the construction programme produced by Skanska in May of 1997. The tender programme reference 100 was submitted to Egger in April and in the course of post-tender reports developed into version 100B reflecting changes in key dates such as Process Entry and Practical Completion for various construction zones.

Mr Recorder Black Q.C. held that programme 100B was the contract programme in the period from 17^th April 1997 to 24^th April 1997. During the lead-up to the commencement of the Contract, adjustments to programme 100B were agreed in the course of a series of meetings involving Skanska, Egger and the ground works consultant and contractors. Programme 100B post 24^th April became the Contract Programme. It is against this programme that any Extensions of Time entitlements should be determined. Mr Pickavance recast programme 100B in Primavera format. There are, I am satisfied, errors in Mr Pickavance’s programme BA00 for example where he has misinterpreted activity reference 38. Sub-contractor procurement commenced on receipt of the letter of intent on 21^st April 1997. I accept the evidence of Mr Simpson that the procurement of sub-contractors continued from this date with all possible speed in accordance with the work package procurement schedule and that this pre-construction activity was vital to the project and its commencement could never have been left until two months into the contract as was concluded by Mr Pickavance.

BA00 also omits the 100B activity for Zone F2 plant foundations. From the evidence of Mr Simpson, it is evident that Mr Pickavance has also added milestone dates to this first version of the baseline programme, which were intended to reflect the zone-by-zone completion dates for each of the principal sub-contractors. In the case of Barr, it was not appreciated by Mr Pickavance that another sub-contractor ABS Brymar was responsible for many of the floor slabs thus the Zones A, B and F milestones should each have been shown two weeks earlier. Four of the KCB L dates are shown to be incorrect as the relevant activity encompassed both steelwork and cladding. Thus the steelwork element of these are all shown completing approximately four weeks later than planned. Zone D’s milestone should be a week earlier while the last for Zone C where there is no steelwork is also shown incorrectly. The programme BAO0 adopted by Mr Pickavance is thus not reliable as a base line. On 23^rd May 1997 Skanska provided three large programme sheets, which reflected events on site since 100B had been issued. These were intended to constitute the construction programme to which the works would be carried out on site. 100B remained of course the contract programme.

The construction programme recast by Mr Pickavance, Programme BA02 identified two critical paths. The first covering the 2^nd June 1997 passes solely through the Warehouse finishing on 8^th February 1998. The second centred via the log park commencing 3^rd December and ending on 6^th February of 1998. Since each zone has its own process entry and practical completion dates, there is the compelling inference that other critical paths must exist which are not the subject of any express consideration in Mr Pickavance’s report. It seems that Mr Pickavance had chosen as the relevant base-line programme, in order to carry out its impact analysis the master programme prepared by Skanska on 23^rd May which for reasons extensively set out in the liability judgment became virtually redundant, almost from the outset because of the late provision of vital information relating to design and layout and changes made on the instructions of Egger. I am satisfied that the sub-zone programmes dealing with each zone separated in planning and programme terms provide a more accurate basis for detailed delay analysis rather than the flawed planned programme BA02 adopted by Mr Pickavance.

Egger submit that the software used by Mr Simpson is incapable of producing a reliable analysis since Power Project is primarily a planning tool creating a graphic representation, it is a dated system and does not have the sophistication of the Pickavance system but I am satisfied that it also has a significant capacity for logical connections and for identifying critical paths and for re-scheduling activities to show how events change. Mr Simpson whilst conceding the Power Project is not suitable for carrying out the kind of impact analysis that Mr Pickavance sought to produce, nonetheless emphasised that it was in fact used for the forward-looking and creative aspect in the planning of a project. It was also used to develop the as built because it was the same system that had been in use by SCL.

Mr Pickavance stated that the effective application of Power Project with its inherent limitations was also dependent upon the ‘intuition’ of its user. A term, it seems, that includes the power of selection of facts and interpretive judgment of them. As a criticism, it is difficult to see how this differs from the process followed and applied by Mr Pickavance’s own team of assistants prior to input into his computer programme. Mr Simpson was available to be cross-examined and his judgment and interpretation was apparent and could be tested. I was not impressed with the evidence of Mr Pickavance for the reasons I have set out above. It was not thorough. It was not complete. He only directly considered critical delay and did not really address disruption and he proceeded from the wrong premise in relation to sub-contract periods which proceeded on the basis of that which is agreed between SCL and the sub-contractor. Mr Pickavance derived notional sub-contract periods from his reconstructed tender and in the reconstruction based upon the SCL three page operational programme of May of 1999. He stated that for N.G. Bailey the contract period commenced on 12^th May 1997 and ran to 30^th January 1998 based on these baseline programmes. In fact the sub-contract was not entered into by N.G. Bailey until July and work then commenced. Mr Simpson’s evidence is subject to the limitations of the system that he used, the integrity of his judgment and the accuracy of his recollection. I have dealt with the first, I am impressed by the second and as to the third, as with any honest witness recollecting complex matters of long ago, he is not as Mr Davies’ skilful testing in cross-examination revealed, wholly infallible where his recollection is unaided. I preferred the evidence of Mr Simpson as to programming and planning matters to that of Mr Pickavance.

Despite the great deal of time spent by the court in hearing the evidence of Mr Pickavance and Mr Simpson, it is common ground between Mr Pickavance and Mr Simpson that the completion of Barr’s works was controlled by the delays which occurred in Zone E which was the critical zone. It is agreed that KCBL were entitled to a substantial extension of time. Mr Pickavance in fact contended for a longer extension of time and a later completion date than advocated either by Mr Simpson or Mr Bradley. Thirdly, N.G. Bailey, it is agreed, were entitled to an extension of time until at least early March of 1998. This being based on delays to Zone F which was a critical zone, controlling the completion of their work.

They arrived at their conclusions by different routes.

Mr Pickavance advanced no evidence as to concurrent causes at all. He was constrained by his instructions and by pressure of time to considering critical delay principally and not disruption.

I will deal briefly with each zone. I have considered the body of the written evidence. It is not necessary or possible to comment on it all. Much is not of primary relevance to the issues. Out of deference to the witnesses and advocates who have tested parts of the evidence, I will deal briefly with some of the outstanding factual issues raised zone by zone and indicate my findings on each extension of time.

In relation to the electrically operated overhead crane, it is apparent at first that Mr Simpson had given undue prominence to design complications introduced by ROD 1.1. It is clear that design changes 1-2 were not reflected in his delay assessment. In relation to floor loading, Mr Simpson found delay. I am satisfied that the factual basis for his conclusion is correct, namely that the steel levels would have had to be adjusted because of the difference in construction between pre-cast and in situ casting on metal necessitating a concrete screed. The garage part of the workshop was not available by reason of a process contractors almost exclusive use of it, so that the operations depending on previously agreed access had to be suspended. The first floor corridor was deleted in late September. Block work had commenced earlier and work continued until that date. Thus the deletion change, I am satisfied, contributed to the delay. I accept the evidence of Mr Simpson that in relation to Zone A, Barr were entitled to 7 weeks extension of time. KCBL 12 weeks and NG Bailey 17 weeks.

As to the Simpson investigation delay, it was Egger’s case that he misunderstood the position as to the sequence of working in laying the fire main. He accepted that he was wrong, this being an M & E matter and not a construction matter. I am satisfied nonetheless and accept his evidence that this made no contribution to his delay analysis. The obligation to provide hot and cold water to the glue kitchen and its effect was considered at the Liability trial. The event giving rise to the delay beyond March was clearly due to the late supply of a non-interruptible gas. Egger’s case in relation to the boiler house was that the scaffolding erected within which prevented Bailey from carrying out the structural work was Skanska's. I am satisfied that this was not the case, the block work was already complete when it was put in and the brickwork was completed from the press side. The impediment was the responsibility of Egger. The consequence of delay on account of the late provision of thermal loadings for the press foundations was considered at the Liability trial in relation to SCL and Egger. In relation to Egger and the sub-contractor, Mr Pickavance says thirteen days delay was caused. Mr Simpson 4 weeks. The delay in the provision of information does not of course mean that the completion was delayed for the same period. It may or not with knock-on effect, give rise to a longer delay. Mr Simpson said in evidence:-

I am satisfied that Mr Simpson’s recollection of delay is correct. I accept it. The extension of time for Barr should be 15 weeks. KCB for design, 9 weeks and for construction 12 weeks. The extension of time for N.G. Bailey should be thirteen weeks.

I accept the evidence of Mr Simpson. Barr are entitled to 17 weeks extension of time for foundations and 15 weeks for the hard standing. KCBL are entitled to an extension of time until 22^nd February 1998 and NGB are entitled to a 13-week extension of time.

I accept SCL’s evidence and the conclusion of Mr Simpson. In my judgment Barr are entitled to 11 weeks extension of time. KCBL to 9 weeks for design and 12 weeks for erection. N.G. Bailey are entitled to 9 weeks extension of time.

I have dealt with the evidence as to the Liebherr crane elsewhere, rejecting Egger’s factual case reflected in Mr Pickavance’s impact analysis. Mr Simpson’s conclusion that Barr were delayed to March 1998, I accept. I observe that there was no challenge to this. In my judgment on the evidence produced before me, Barr are entitled to six weeks extension of time for design and 24 for construction. KCBL are entitled to 9 weeks for design and 13 for erection. N.G. Bailey are entitled to 19 weeks.

Mr Pickavance’s conclusion was that Barr extension of time entitlement was dependent upon an identified period of culpable delay in Barr progress.

Mr Pickavance not unsurprisingly was asked about his conclusions of culpable delay:

In relation to N.G. Bailey, this zone was the critical zone. I accept Mr Simpson’s evidence in relation to this zone. I reject the evidence of Mr Pickavance. In relation to this zone, Barr are entitled to 8 weeks extension of time, KCBL to 12 weeks for design and 13 for erection. NGB have demonstrated an entitlement to 19 weeks.

Overall in programme terms, therefore, Barr with a programme start date of 20^th May 1997 ending 15^th September 1997 were entitled to an extension of time of 25 weeks until 8^th March 1998.

KCBL with a start date of 28^th April 1997 and an end date of 31^st August 1997 were entitled to 16 weeks until 31^st December.

N.G. Bailey with a programme start date of 4^th August 1997 and an end date of 22^nd December 1997 were entitled to 11^th April 1998 extension of time for the process buildings and 15 weeks for the despatch offices.

An extension of time is not of course co-extensive with a prolongation period. The extensive programming evidence has convincingly demonstrated that the delay and disruption caused by Egger and considered extensively in the liability trial in relation to SCL inevitably impacted upon the sub-contractors. Despite a positive case pleaded, there is no reliable evidence of concurrent causation. No expert evidence was offered in relation to this part of the case by Egger. There is no cogent evidence of disruption and delay caused otherwise than by Egger. The person who dealt with the sub-contractor claims was Mr Bradley. He has been involved in three of the trials in this case. The Preliminary issue hearing as to whether there was a contract being the first trial, secondly the liability trial and now the quantum trial. Submissions were made about his credit arising out of the preliminary issue trial and the findings in the judgment of Mr Recorder Black Q.C. He supported the case put forward by SCL and others and rejected by the learned Recorder. As to the quantity surveying matters that he has been concerned with on site throughout, I have found him to be a conscientious and objective witness who was careful in matters of detail and in record keeping. In matters of unaided recollection, not unsurprisingly he has shown himself capable of making a mistake. In a project as complex as this and given the time since events occurred, it would be unreal to expect such a witness to be infallible. His account of matters concerning the project informs such witnesses as Mr Wishart and Mr Simpson. Mr Davies is right to counsel caution as to the weight to be given to evidence based upon untested parts of Mr Bradley’s evidence.

Barr claimed £1.005m. They were paid £650,000 as part of a commercial settlement. Barr’s sub-contract corresponded in extent with programme 100B and from the outset was affected by the changes in consequence of AJSP’s revised layout. As early as June they intimated that acceleration measures were necessary to achieve progress, by July SCL accepted that special reasons might be necessary whilst resisting ‘accelerative measures’, additional staff were taken on by Barr to cope with an effective reduction of construction periods caused in part by the late provision of essential information. This put pressure on labour resources. Barr’s letter of 29^th August 1997 included its interim claim for the costs of exceptional measures. In September SCL’s Mr Tranter and Mr Bradley met with Mr John Dent of Egger and Mr Johnson of Turner & Townsend who were kept fully informed as to the position. In September of 1997, £125,000 was paid by Egger to SCL for Barr. This was later deducted from SCL’s interim valuation No.9.

It is evident and I accept that during the currency of the works Barr asserted that they were delayed and disrupted and were suffering loss as a consequence. An SCL management team-meeting minute of the 17^th July 1997 records, amongst other things,

“…the workload facing Barr is daunting, without the information it will not be achievable…Barr must not be given an opportunity to state progress delay by lack of or late information.”

Mr Bradley gave evidence of his detailed review of Barr’s subsequent claim and his conclusion that of £1,005,000, £561,000 was justified. In February of 1999 he negotiated a final account settlement with Barr’s managing director, Mr Chalmers, of £650,000, more than his initial assessment but much less than the claim, reflecting as he judged it, the commercial reality of the situation. The Barr claim was divided into two parts, the first a disruption claim with a small element of prolongation up to 19^th December of 1997. This claim was put forward at £712,000. It was assessed and later paid by Mr Bradley at £335,000. The Additional Work Records claim (AWR) was claimed at £226,000. Mr Wishart has carried out a full review of this claim and has approved them to the extent of £185,000. His review was based upon the information provided by Mr Bradley and confirmed by him in his evidence on day 3. I am satisfied that the information is reliable and that Mr Wishart’s investigation has been thorough. He confirmed, and I accept, that much of the Barr claim was for disruption and delay and that he has characterised in his report every single element of the Barr’s claims. I am satisfied that this claim is based upon Egger’s changes and breaches and there are no other material contributory causes. The overall settlement contains an element to make the offer attractive and therefore reflecting the good sense of buying off the risks associated with the litigation and consequent uncertainty.

Mr Simper’s approach to this claim was diffident and unhelpful. He did not attempt the kind of analysis carried out by Mr Wishart, merely saying that it was irrelevant. I reject Mr Simper’s evidence and accept Mr Wishart’s evidence and assessment of £610,000 because it was based on detailed first-hand knowledge of the project. I accept that a very small element of the original Barr claim may have included matters for which they were responsible, or others. The reasonable negotiated settlement by Mr Bradley, I am satisfied would have been on the basis that all arguments to diminish the settlement figure were deployed since SCL had to fund this settlement themselves, Egger having stepped away from the problem. The reduced figure assessed by Mr Wishart, also reflects these considerations. In my judgment this claim is properly and reasonably assessed in the sum of £610,000 and I value it accordingly.

KCBL’s claim was for £865,000. £280,000 was paid as part of the commercial settlement. KCBL recorded each change to its sub-contract as a change number (CVN).

The evidence of Mr Bradley indicates that he pursued a robust assessment of this claim identifying the shortcomings of KCBL in their performance where appropriate. His written evidence at paragraph 361 epitomises his careful approach.

“KCBL was claiming an extension of time of 28 weeks and I did not think that that was correct. I was aware, from dealing with all of the correspondence leaving and arriving on site, that KCBL was not exactly blameless for all of the delay it had incurred. It had suffered some ‘hiccups’ with deliveries, erection and resources, although these were often due to the changes instigated by Egger that impacted on the original sequence. Similarly some of the causes of the delay it relied upon were matters which were due to KCBL’s lack of understanding of the employer’s requirements e.g. the horizontal cladding to the south elevation of the warehouse. KCBL had assumed incorrectly that the cladding would be vertical. Any payment in respect of Loss and Expense would have to reflect this i.e. KCBL would not receive payment arising out of delay and disruption of its own making.”

Mr Pickavance in his evidence accepted that KCBL were entitled to a longer extension of time than either that put forward by Mr Simpson or by Mr Bradley in negotiation. Mr Simper posits that part of KCBL’s delays must have been due to delay or inefficiency by Barr. There is no evidence of this. Mr Pickavance has not considered this assertion, let alone supported it. Mr Bradley’s evidence was tested in cross-examination and was not shaken. I accept the assessment evidence of Mr Wishart. There is no basis for reducing this claim below the claim figure of £280,000. In my judgment on the evidence before me, that is the proper figure for the valuation of this claim. I so value it.

This sub-contractor claim falls into a different category to the others that I have considered because it has not yet been paid. The claim is for £322,000. It has three elements, disruptive costs during the original contract period, prolongation costs from December 1997 to June of 1998 and consequential costs including overheads and claim preparation.

Mr Wishart’s detailed analysis produces an assessment figure of £187,000. Mr Simper has not attempted one.

Mr Percy and Mr Taylor from N.G. Bailey have given evidence before me both in written form and orally. I am satisfied that as to disruption and prolongation that their costs have been proved, however, there are other matters raised by Mr Simper, the Egger expert which warrant further consideration. Firstly the cost of preparing the claim, Mr Simper contends that in principle these costs are not recoverable. SCL contend that they have been incurred as an alternative to formal proceedings by N.G. Bailey against SCL. That may be so, but why should Egger pay them as part of this sub-contractor’s bill? I see no good reason. Insofar as Egger have challenged the payment due to N.G. Bailey and proof is thereby necessary to substantiate this claim, the costs of preparation may be recoverable as part of the costs of the action. Secondly Mr Simper objects to payment of overheads. In my judgment these properly form part of their costs and the loss and expenses claim which is recoverable. Thirdly, there is the question of interest. In my judgment this properly does form part of the N.G. Bailey claim against SCL which properly can be passed on to Egger since these relate to non-payment of sums due to N.G, Bailey in respect of loss and expense. This claim is made out at £175,389.

This was a claim by Barr for £63,000. It was settled at £28,000. Mr Bradley gave evidence as to the claim, which related to 50 individually priced documents relating to specific and discrete issues. He was asked about the fabric Terram but it is evident that this claim did not relate to works involving the inclusion of Terram. I am satisfied that Barr had a proper claim to further payment and that Mr Bradley entered into a commercial settlement of their claim in the sum of £28,114. Mr Wishart on the basis of Mr Bradley’s evidence says ‘I have not seen a breakdown of the settled value. I can see that Barr time on site was delayed. I rely upon Mr Bradley that the settled amount was reasonable and adopt his valuing’.

I am satisfied that there was a claim and a compromise. Nowhere is there any breakdown of the claim or evidential validation that it stems from disruption or delay caused by Egger. Merely because it was claimed and paid does not of itself justify the inference that it was caused by Egger. I am not satisfied as to this claim and I reject it.

This is a claim for £47,511 loss and expense. SCL paid £19,142. I am satisfied that delay and disruption followed inevitably from the delay to KCBL. The roof and wall could not be fixed until the structural frame was in place. I reject Mr Simper’s floated possibility that Barr may have caused delay to Devon. The claim is made out. I am satisfied that Devon’s had an entitlement and that the settlement was reasonable. I value it at £19,142.

This is a claim for £58,000 for loss and expense. A commercial settlement was arrived at in March of 1998. SCL paid £14,132. I accept Mr Bradley’s evidence as to their entitlement to claim and Egger’s liability and Mr Wishart’s assessment. Mr Simper accepted that he had not looked at this claim in any detail. I am satisfied that no delay was due to Barr. This claim is made out in the sum of £14,132.

Egger claim £1,412,489.

The production process in the Barony Factory is on a 24-hour continuous basis most of the year. The varying demands for product put a premium on the availability and flexibility of warehouse storage space.

The working capacity of the warehouse given the size of the board produced, the space to enable efficient stacking and removal and fire safety considerations, I am satisfied is approximately 26,500 cubic metres.

Cracks in the warehouse slab started to appear as early as October 1997. By the time the court inspected these in the summer of 2000 they were very pronounced. In October 2000, Egger served its Part 20 Counterclaim claiming damages for breach of contract in relation to the construction of the floor slab. SCL in its defence of the Part 20 claim countered by denying liability, saying that the loss ought to have been recoverable under the relevant contract works insurance policy. This issue was determined as a preliminary issue in May of 2001 in favour of SCL. Egger successfully appealed. On 22^nd March of 2001 SCL accepted that they had no defence to this part of the counterclaim. To date remedial works have not been undertaken. Throughout the trial, Egger has endeavoured to perfect its case as to the appropriate remedial solution, its cost and the consequential losses arising when essential storage space is taken out of use whilst repair occurs.

Egger had not done anything of significance to repair the floor in the five years since its defect became apparent or even devised and costed a remedial scheme until late in the day. SCL contend that there is no real intention by Egger to undertake this work at all. They contend that there is no documentation to indicate that the Egger main board have made a decision to this effect. The company secretary Mr Slorick says that they are minded to. Mr Walsh Egger’s Structural Engineering Expert was instructed to produce a design and has done do. Mr Johnson of Turner & Townsend has put the matter out to tender and Raynesway have tendered on the Walsh design. Mr Gardner, late managing director of Egger Barony, Chief Architect of the Egger claim and defence to SCL’s claims has no first-hand knowledge of Egger’s intention. He has procured the design and the continuing services of Turner & Townsend, the quantity surveyors. Such expenditure is as consistent with a mere claims quantification as with manifesting a real intention to execute the works. On 25^th May 9 of 2003 a letter of intent was issued by Egger. It was issued to Raynesway Construction Services Ltd. but required signature from Raynesway Construction Ltd. SCL contend that Egger has no real intention to undertake these remedial works and the commitment they have demonstrated thus far is very limited. Mr Williamson Q.C. submits that the intention of Egger is relevant to the question of reasonableness and to the issue of whether the measure of damages is rectification or diminution in value. In support of his argument he cites Ruxley Electronics v Forsyth [1996] AC at page 344. In that case Lord Mustill explained the position as follows:

“I fully accept that the Courts are not normally concerned with what the Plaintiff does with his damages. But it does not follow that his intention is not relevant to reasonableness, at least in those cases where the Plaintiff does not intend to reinstate …”

The relevance of intention to the re-issue of reasonableness is expressly recognised by the respondent in his case. In paragraph 13 Mr Jacobs says:

“The Respondent accepts that the genuineness of the parties indicated pre-dispositions can be a factor which the Court must consider when deciding between the alternative measures of damages where a plaintiff is contending for a high as opposed to a low cost measure of damages, the Court must decide whether in the circumstances of the particular case, such a high costs measure is reasonable. One of the factors which may be relevant is the genuineness of the Plaintiffs desire to pursue the course which involves the higher cost…..

I can only say that I find myself in complete agreement with that approach.”

Mr Williamson QC submits that the proposition that remedial works are now necessary must be treated with scepticism given that Egger have had the run of the factory for 5 years without carrying out any remedial works and without any expressions of concern emanating from those who have responsibility for managing the factory over that period.

However when considering the question as to whether delay in carrying out the proposed works is unreasonable, it is important to note that it may be reasonable for a claimant who starts proceedings which are contested and conducts them with reasonable expedition to delay carrying out the works until the result of the contested proceedings is known. In Radford v Froberville [1977] 1WLR 1262 at page 1287 Oliver J. stated:

“…once proceedings have been commenced and are defended, I do not think that the defendant can complain that it is unreasonable for the plaintiff to delay carrying out the work for himself before the damages have been assessed and more particularly where the right to any damages at all are being contested, for he may never recoup the cost. If therefore the proceedings are conducted with due expedition, there seems to me to be no justice if, by reason of the time that it takes them to come to trial, the result of inflation is to increase the pecuniary amount of the defendant’s ultimate liability. She (the defendant) retains after all the use of the money in the meantime and can crystallise her liability by a payment into court if she so wishes”.

Mr Williamson QC submits that it has been Egger’s intention in this matter to maximise the paper value of this counterclaim whilst not committing themselves in fact to carry out any remedial works in contrast to the position in relation to the drainage issues where substantial and expensive work have been carried out on the advice of Dr Barr. Mr Williamson also contends that damages should not be assessed on a rectification basis but on a diminution in value basis and since no diminution in value case has been advanced, it would follow that the measure of damages for the counterclaim would be zero, save in relation to professional fees and the like, already incurred. In the alternative he submits that the court should take the question of intention fully into account when assessing the amount of damages to be awarded. This can be done by both viewing with special scepticism any contentious figures put forward and by making an overall discount on any award to reflect the accelerated receipt of monies in respect of works which may never be carried out or which may only be carried out far in the future.

In my judgment the starting point must be 22^nd March 2001 when SCL accepted that there was no defence to this claim. They actively pursued their insurance defence through first instance and in the Court of Appeal. Egger were entitled to prioritise their capital expenditure and put up with a bad job with a far from ideal warehouse floor, using steel plating to cover the cracking until some assurance was forthcoming that SCL would and could meet its obligations enabling remedial works to be put in hand. SCL of course were contractually obliged to design and construct a floor with a 25-year lifespan. As far as delay is concerned the clock did not start to tick until 22^nd March 2003. I am satisfied that the steps taken by Egger to cost and formulate a remedial scheme in the circumstances of this litigation are reasonable where most matters of substance have been the subject of heated contention. There is no evidence that would impel the conclusion that Egger did not intend to carry out the remedial scheme designed by Mr Walsh. I am persuaded that they will. There is no failure demonstrated by SCL that Egger have failed to mitigate its loss. The late and evolving particularisation of the Walsh scheme has confronted SCL with some evidential difficulties. For understandable reasons they did not seek an adjournment to deal with these. A statement as to the cost of the proposed remedial scheme was served by Mr Bradley who was not called to give evidence. His assertions could not be cross-examined upon. Nonetheless they were of value, in the nature of submissions. To the extent that his assertions were adopted by witnesses such as Mr Johnson and Mr Walsh, then they became evidence. Otherwise they have the status of arguments which stand or fall by the evidence.

It is now accepted by both parties that the replacement of the whole floor to achieve the technical performance requirements of the original floor slab is the cheapest remedial option. The floor slab will be divided into eleven areas which will be sequentially taken up and replaced within a tented area to minimise dust and disruption to the nearby manufacturing process. Areas 6 and 7 nearest to the production line cannot be replaced whilst the production line is in operation. The scheme envisages that this replacement work in areas 6 and 7 will be done whilst the plant is shut down for its annual two-week maintenance period. This will give rise to the necessity to use concrete in areas 6 and 7, which cures rapidly and enables these areas to be used for storage when the plant recommences its operations after two weeks.

The original floor slab was a 225mm. thick steel fibre reinforced concrete slab on 300mm thick Department of Transport Type 1 Aggregate as described in DOT Specification Roads and Bridges, 5^th Edition, on existing ground. Mr Walsh commented as to that original design in his report:

“However, on a provisional basis, provided the dosage of fibres were as their manufacturers normally recommend for such work, it is my opinion that a 225mm steel fibre reinforced concrete slab can be just as good as and in some respects better than, a 300mm thick conventionally reinforced concrete slab.

4.4.2

the reduction of the combined capping and sub-lace bares to 300mm only of sub-base is also acceptable on technical grounds provided adequate ground-baring capacity and stillness has been achieved in practice.”

He went on to observe that the adequacy of sound slab curing was critical to optimise the strength of the concrete where slabs were shallow in a vertical direction relative to their horizontal dimensions in order to avoid differential shrinkage between top and bottom layers which leads to curling. He saw no evidence that slab curing methods were being applied. His evidence serves to underline the desirability of quality assurance and professional supervision of such a critical operation.

Mr Walsh accepted that a 225mm slab suitably reinforced would be an appropriate replacement slab provided a contractor was willing to build it. The tender process has not produced anyone who is willing. There is a further potent disadvantage. Fibre reinforced concrete is best suited for much larger areas of continuous laying. The replacement of this slab will not be continuous as such. It will be in discrete segments to enable the factory to remain operational. Mr Walsh rejects Mr Bradley’s proposals as to a more economical 225mm design. I accept Mr Walsh’s expertise as to design and his clear reasons for proposing a 300mm slab design based on sound engineering practice and the minimising of risk in consequence of any operational difficulties.

The base on which the slab is to be laid is clearly suspect. The evidence of Dr Card the geo-technical expert is clear. The professionals who advise Egger, Mr Johnson of Turner & Townsend in particular, as to the cost of the remedial scheme advise a contingency of £50,000 on account of unforeseen ground conditions. It would be irresponsible for them to ignore this risk. At least one other of the tenderers adverted to the questionable quality of the sub-base and the need to take costly measures. In my judgment the costs should include a substantial contingency to allow for risk in this respect. £30,000 in my judgment would be the appropriate sum. The process of taking up the existing slab, preparing the sub base and laying concrete of necessity involves the use of heavy mechanical equipment and plant such as a back-akter. However careful, some damage to the columns may well occur. It is prudent and reasonable as Mr Johnson and Mr Simper say in evidence, to place a provisional sum in the contract sum to reflect damage to the paintwork of the columns and a proper sum in my judgment reflecting this would be £10,000.

Whilst there is no plant as such in the warehouse, there are power sources and lighting systems and a water supply. I am satisfied on the evidence that a prudent advisor would reasonably make provision for mechanical and electrical matters arising out of the taking up of old concrete and the installation of new floor slabs. I reject Mr Wishart’s evidence that the elements of day work for electricians and plumbers have no relevance to this defective floor slab. The sum is properly part of the contract provision.

Mr Bradley asserts that savings in the contract could be achieved if there was a reduction in the grade of concrete used from Grade 60 to Grade 35. It is essentially a technical matter. There is no cogent technical evidence, which should gainsay that of Mr Walsh, who is of the professional view that Grade 60 is appropriate. I accept his evidence. It has the added advantage that it is swift to cure and will enable parts of the warehouse to be of utility sooner than if Grade 35 were used in its stead.

Mr Bradley argues in his memorandum that if 24-hour working were adopted in all areas not just areas 7 and 8, there could be a saving on the contract. Raynesway, the contractors, I am satisfied, are not prepared to consider this option. It is an interesting academic option. I am not persuaded that a significant saving would be made in any event.

Egger are entitled to

Engineering Fee (as agreed) £53,664.17

Fees for Walsh Associates 6% which I judge to be reasonable….£63,849.55

Turner & Townsend’s Cost of Management Services (agreed)…£17,360.00

Remedial works… £1,064,155.86.

In my judgment a Resident Engineer should be employed to oversee these works. I have already adverted to the necessity for sound supervision. The sum of £24,000 in my judgment is wholly reasonable.

Engineering fee £53,634.12.

Turner and Townsend’s cost of management services

Remedial works inclusive of Kerr and Gerco works

The sum of £189,460 is claimed on the basis of

rental of 2,500 M2 warehouse space for 20 weeks. £64,560 .00

handling costs at rented warehouse for 20 weeks… £25,900.00

(Transport costs ) for 20 weeks £99,000.00

SCL produced an analysis, which indicated that allowing a warehouse capacity of 27,000m2, there was always existing spare capacity. Egger produced stock levels relating to the year 2002. There was no analysis or disclosure of stock levels more recent. Egger have not produced any reasoned analysis of the logistics relating to the existing warehouse capacity and the effect upon parts of it being sequentially withdrawn for storage purposes. The use of swifter curing concrete means that the amount of time a segment is not in use is lessened. Levels of production and levels of demand determine the extent that the warehouse spaced is utilised. There is a dearth of reliable evidence as to these matters. The timing of the work of course will affect these elements. Increased demand may relieve the necessity for storage. A turn down in demand and adjustment in production might also affect the need for storage. I accept that a degree of dislocation for storage and supply system will occur when remedial works are undertaken, which may put a strain on transport facilities and temporary pressure on storage resources. I assess the level of consequential loss and damage under this head at £60,000. I also accept the claim for a ‘sweetener’ of £30,000 to be paid to Raynesway. Despite its pejorative overtone it is properly incurred and due.